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Assume that the yen/dollar exchange rate quoted in Tokyo at 3:00 p.m. is ¥120 = $1, and the yen/dollar exchange rate quoted in New York at the same time is ¥123 = $1. A dealer in New York uses dollars to purchase yen and then immediately sells the yen to buy dollars in Tokyo, thereby making a profit. The dealer has engaged in: Group of answer choices

Respuesta :

The dealer in New York is engaged in arbitrage.

What is arbitrage?

Arbitrage is when a market participant takes advantages of price differences in more than one market with the aim of making profit. The market participant usually buys currency in the cheaper market and sells in the more expensive market and thus earns a profit.

To learn more about arbitrage, please check: https://brainly.com/question/15721593

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