Assume that the yen/dollar exchange rate quoted in London at 3 p.m. is ×120 = $1, and the New York yen/dollar exchange rate at the same time (10 a.m. New York time) is ×123 = $1. Which of the following transactions would yield immediate profit?
A) Forward exchange
B) Carry trade
C) Currency swap
D) Arbitrage
E) Currency speculation
Correct Answer:
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