CFA Practice Question

There are 275 practice questions for this study session.

CFA Practice Question

Suppose that the exchange rates (after taking out the fees for making the exchange) in London are £5 = $10 = ¥1000 and the exchange rates in Tokyo are 1000 = $12 = £6. Converting ¥1000 to $12 in Tokyo and converting that $12 into ¥1200 in London, for a profit of ¥200, would be ______.
A. securitization
B. arbitrage
C. investing
Explanation: In reality, this "triangle arbitrage" is so simple that it almost never occurs.

User Contributed Comments 0

You need to log in first to add your comment.