Question

63. An arbitrageur in foreign exchange is a person who

a- buys foreign currency hoping to profit by selling it at a higher exchange rate at some other date

b earns illegal profit by manipulating foreign exchange

c- causes differences in exchange rates in different geographic markets

d- simultaneously buys large amounts of a currency in one market and sells it in another market

e- mediates disputes when there is no agreement on exchange rates in international currency market

Answer 1

Arbitrage of foreign currency means getting to buy one currency and simultaneously selling it another market and the difference in the interest rate is the source of the profit all in all

Therefore (d) simultaneously buys large amount of a currency in one market and sells it in another market all in all.