Which of the Following Refers to Carry Trade

question 87

Multiple Choice

Which of the following refers to carry trade?

• A)Providing insurance or hedging against the risks that arise from volatile changes in exchange rates
• B)A transaction between two parties that involves exchanging currency and executing a deal at some specific date in the future
• C)Simultaneous purchase and sale of a given amount of foreign exchange for two different value dates
• D)The purchase of securities in one market for immediate resale in another to profit from a price discrepancy
• E)Borrowing in one currency where interest rates are low and then using the proceeds to invest in another currency where interest rates are high

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