When someone in the currency market can buy a currency at a low price and sell it for a higher price,it is known as ________.

Question

Quizplus · Accepted Answer

Arbitrage is the practice of buying a currency at a lower price in one market and selling it for a higher price in another market to make a profit. This is a common strategy used in the currency market by traders and financial institutions to take advantage of market inefficiencies and price discrepancies. The other options, such as bid-ask spread and interbank currency market, are related to the functioning of the currency market but do not describe the specific strategy of buying low and selling high. Hedging is a different strategy used to mitigate risk in currency trading.

When Someone in the Currency Market Can Buy a Currency