Multiple Choice
Assume that the interest rate on borrowings in India is 1 percent while the interest rate on bank deposits in a U.S.bank is 6 percent.John,an active currency trader borrows in Japanese yen,converts the money into U.S.dollars and deposits it in a U.S.bank.John is engaging in
A) currency speculation.
B) hedging.
C) currency swap.
D) arbitrage.
E) carry trade.
Correct Answer:
Verified
Correct Answer:
Verified
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