You purchased 500,000 Swiss Francs in London at an exchange rate of 0.6705 to the dollar and simultaneously sold the francs in New York at an exchange rate of 0.6692 to the dollar.What is the name for such a transaction?

Question

Quizplus · Accepted Answer

This transaction is an example of arbitrage, which involves taking advantage of price differences in different markets for the same asset. In this case, the trader bought Swiss Francs in London at a lower exchange rate and sold them in New York at a higher exchange rate, making a profit from the price difference.

You Purchased 500,000 Swiss Francs in London at an Exchange