If Citi in New York has a buy rate of $0.0127 per yen and Sumitomo Bank in Tokyo has a buy rate of $0.0157 per yen,an arbitrager could profit by buying yen in Tokyo and simultaneously sell them in New York.

Question

Quizplus · Accepted Answer

The arbitrager would profit by buying yen in New York at the lower rate ($0.0127) and selling them in Tokyo at the higher rate ($0.0157), not the other way around.

If Citi in New York Has a Buy Rate of $0.0127