Jason works in finance at an MNE.Part of his job is to invest large sums of money in various markets.His latest transaction was investing $10,000 in British pounds for 120 days, then taking the British pounds and investing them in euros for 90 days, and then converting it all back to U.S.dollars.Jason is most likely participating in ________.
A)interest arbitrage
B)speculation
C)cryptocurrency
D)options

Question

Quizplus · Accepted Answer

Jason is taking advantage of interest rate differentials between different currencies to earn a profit. This is known as interest rate or yield arbitrage. Speculation typically involves taking on greater risk for potentially higher returns, and there's no indication that Jason is doing so here. Cryptocurrency and options are not relevant to this scenario.

Jason Works in Finance at an MNE