Suppose £1 Is Trading for $2

question 18

Multiple Choice

Suppose £1 is trading for $2.00 in New York City and $1.80 in London. A foreign exchange trader could take $1.80 and buy £1 in London's financial exchange market and then sell it for $2.00 in New York's financial exchange market. What is this an example of?

• A) two-point arbitrage
• B) three-point arbitrage
• C) covered interest
• D) arbitrage of goods

---

Definitions:

Relations-oriented Role

A focus or function in teamwork or leadership that prioritizes maintaining positive interpersonal relationships and team dynamics.

Diversity

The inclusion of individuals from a variety of backgrounds, perspectives, and abilities, enriching the social fabric and potentially increasing organizational effectiveness.

Shared Responsibility

The concept that duties and obligations are distributed among members of a group, leading to collective accountability.

Goal-oriented

Being goal-oriented refers to having a focus on setting and achieving specific objectives, driving actions and decisions towards desired outcomes.