Assume That the Interest Rate on Borrowings in Japan Is

Multiple Choice

Assume that the interest rate on borrowings 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