Scenario: Trader's Paradise
Trader's Paradise is a global merchant that sells a variety of products. The company operates in 48 different countries (some developed, some developing) and some former communist countries. The company faces substantial risks given differing conditions in foreign exchange markets.
-If Trader's Paradise purchases and sells the European Union euro simultaneously in different markets for profit, it would be called currency ________.

Question

Quizplus · Accepted Answer

Currency arbitrage involves buying and selling currencies simultaneously in different markets to make a profit from the difference in exchange rates. This is the best choice for the scenario described as Trader's Paradise is looking to make a profit from fluctuations in foreign exchange markets. Currency conversion refers to the process of exchanging one currency for another, while speculation involves taking risks to profit from fluctuations in currency values. Hedging involves using financial instruments to manage the risk of currency fluctuations but does not focus on making a profit from them.

Scenario: Trader's Paradise Trader's Paradise Is a Global Merchant That Sells a Variety