Assume That the Interest Rate on Borrowing in Japan Is

Multiple Choice

Assume that the interest rate on borrowing in Japan is 1 percent, while the interest rate on deposits in Australian banks is 5 percent. A trader borrows in yen and then converts the money into Australian dollars and deposits it in an Australian bank to make a 4 percent margin. Which type of trade is this an example of?

A) swing trade
B) carry trade
C) channel trade
D) price action trade