Assume that the yen/dollar exchange rate quoted in London at 3 p.m.is $\times$120 = $1,and that the New York yen/dollar exchange rate at the same time is $\times$123 = $1.Which profit making situation exists here?

Question

Quizplus · Accepted Answer

Arbitrage is the purchase of securities in one market for immediate resale in another to profit from a price discrepancy.A dealer could buy yen in London and resell it in New York immediately.

Assume That the Yen/dollar Exchange Rate Quoted in London at 3