Assume that the yen/dollar exchange rate quoted in London at 3:00 p.m. is ¥115 = $1. Rinaldo finds out that the rate quoted in New York at 10:00 a.m. (3:00 p.m. London time) is ¥135 = $1. Rinaldo decides to buy yen in New York and sell it in London. Rinaldo is engaging in

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Rinaldo is engaging in arbitrage, which involves taking advantage of the price difference between two markets to make a profit. He buys yen in New York where it is cheaper and sells it in London where it is more expensive.

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