Whenever there is a difference in the same exchange rate offered in two markets, an arbitrageur would:
a. wait for the markets to come to equilibrium.
b. buy in the market where the currency is offered at the cheaper rate,and simultaneously sell the currency where the rates are higher.
c. sell the cheaper-rate currency in the home market.
d. not consider the trade, since prices would undoubtedly change before it could be executed.
Ans: b. buy in the market where the currency is offered at the cheaper rate,and simultaneously sell the currency where the rates are higher.
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