If the exchange rates,after fees,in Tokyo are ¥1000 = €6 = $9 and the exchange rates in Paris are €1 = $1.5 = ¥171,which of the following would you expect to occur?
A)a surge in conversion of dollars to yen in Tokyo
B)a surge in conversion of euros to yen in Tokyo
C)a surge in conversion of euros to dollars in Paris
D)a surge in conversion of euros to yen in Paris

Question

Quizplus · Accepted Answer

In Paris, €1 = $1.5, while in Tokyo, €1 = $9/¥1000. Therefore, it is more profitable to convert euros to yen in Paris and then convert the yen to dollars in Tokyo.

If the Exchange Rates,after Fees,in Tokyo Are ¥1000 = €6