When a person simultaneously buys currency at a less expensive location and sells that same currency at a more expensive location,the transaction is known as:
A)locational arbitrage.
B)hedging.
C)a currency swap.
D)a currency conversion.

Question

Quizplus · Accepted Answer

Locational arbitrage is the practice of buying a currency at a lower price in one location and then immediately selling it at a higher price in another location. This transaction takes advantage of price inefficiencies in different markets, and quickly exploits profits by flipping currency. Hedging involves minimizing risk rather than profiting from market inefficiencies. Currency swaps and conversions refer to different types of trades, but do not specifically involve buying and selling currency at different locations.

When a Person Simultaneously Buys Currency at a Less Expensive