You purchased 3,000,000 Indian rupees in London at an exchange rate of 54.86 to the dollar and simultaneously sold the rupees in Bahrain at an exchange rate of 55.12 to the dollar.What is the name for such a transaction?

Question

Quizplus · Accepted Answer

This is an example of arbitrage, which involves taking advantage of price differences in different markets for the same asset. In this case, the individual purchased Indian rupees at a lower exchange rate in London and then sold them at a higher exchange rate in Bahrain, profiting from the difference.

You Purchased 3,000,000 Indian Rupees in London at an Exchange