Assume That the Yen/dollar Exchange Rate Quoted in London at 3:00

Multiple Choice

Assume that the yen/dollar exchange rate quoted in London at 3:00 p.m.is 125 yen = 1 dollar.Sylvia finds out that the rate quoted in New York at 10:00 a.m.New York time (3:00 p.m.in London) is 130 yen = 1 dollar.Sylvia decides to buy yen in New York and sell it in London.Sylvia is engaging in

A) currency swapping.
B) currency speculation.
C) carry trade.
D) arbitrage.
E) hedging.