An act of buying currency in one market at a lower price and selling it in another at higher price resulting in equilibrium in exchange rates of different currencies is called _________________.

Question

Quizplus · Accepted Answer

Arbitrage involves buying and selling the same asset in different markets to profit from the price difference, leading to equilibrium in the prices across markets. In the context of currencies, this means buying a currency where it's cheaper and selling it where it's more expensive, thus contributing to equalizing the exchange rates.

An Act of Buying Currency in One Market at a Lower