Question

Question 1 3 pts Which of the following is an example of arbitrage? A saver buys stocks so that there will be money in her 401k when she retires Amiddleman buys food from farmers at harvest time to sell in cities A currency trader watches for slight discrepancies between exchange rates offered at different banks, then makes billion dollar transactions to earn millions. An Ebay seller buys up Black Friday discounted items to resell one week later at a 25% markup Agrocery store buys diapers from a wholesaler and sells them to families at a 10% markup

Answer 1

Answer - Option C

The currency trader watches the discrepancies in the exchange rates offered at the different banks then makes the billion dollar transaction to earn millions

This is the example of the arbitrage opportunity where the securities , currency are brought and sold seeing the difference in the exchange rates.

The other options do not represent the arbitrage.