Assume that the yen/dollar exchange rate quoted in London at 3:00 p.m.is 125 yen = 1 dollar.Sylvia finds out that the rate quoted in New York at 10:00 a.m.New York time (3:00 p.m.in London)is 130 yen = 1 dollar.Sylvia decides to buy yen in New York and sell it in London.Sylvia is engaging in

Question

Quizplus · Accepted Answer

Sylvia is engaging in arbitrage, as she is taking advantage of the difference in exchange rates between two markets by buying yen in one market (New York) and selling it in another market (London) to make a profit.

Assume That the Yen/dollar Exchange Rate Quoted in London at 3:00