The Act of Purchasing Currency in One Market at a Lower

question 32

Multiple Choice

The act of purchasing currency in one market at a lower price for immediate resale in another market at a higher price in order to make a profit is called:

• A)arbitrage
• B)hedging
• C)speculation
• D)interest arbitrage

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Definitions:

Interest Rate

The amount charged by a lender to a borrower for the use of assets, usually expressed as a percentage of the principal.

Asset Turnover

A ratio that calculates how effectively a company utilizes its assets to produce sales income.

Sales Revenue

The total amount of money generated from sales of goods or services before any costs or expenses are subtracted.

Invested Capital

The total amount of money invested into a company by shareholders and debtors, used to fund the company's operations and growth.