A trader who simultaneously bought Swiss francs in New York for 1.0222 and sold them in Zurich for 1.0233 would be practicing [blank].

Question

Quizplus · Accepted Answer

The trader is exploiting a price difference between two markets, buying low in New York and selling high in Zurich. This is a classic example of simple arbitrage. Inside trading involves using non-public information to make trades, compound arbitrage involves multiple transactions to capture profit, and direct trading refers to trades made directly between two parties without an intermediary.

A Trader Who Simultaneously Bought Swiss Francs in New York