Arbitrage refers to the practice of buying an asset or currency at a lower price in one market and immediately selling it at a higher price in another market to make a profit. Option B describes this practice accurately. Options A, C, and D are not related to the concept of arbitrage.

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What Is Arbitrage

Question 68

Multiple Choice

What is arbitrage?

A) The cost of shipping and insuring exported goods.
B) The buying of a currency at one price and its immediate sale at another price.
C) The cost of holding goods whose price is expected to increase in the future.
D) Speculation on the future price of a currency.

Correct Answer: