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Arbitrage Is the Purchase of Foreign Currency on One Market

question 84

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Arbitrage is the purchase of foreign currency on one market for immediate resale on a foreign market in order to profit from a price discrepancy.


Definitions:

Foreign Exchange

The trading of currencies against one another in the forex market or the conversion rate from one currency to another.

Alternative Exchange Rates

Exchange rates that apply in parallel exchange rate systems, where official and market-based rates exist concurrently for currency conversion.

Translate

In financial contexts, it often involves converting financial statements from one currency to another.

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