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CORPORATE AND INSTITUTIONAL GLOSSARY


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Current TermArbitrage
Arbitrage
(1) Simultaneous buying and selling of foreign currencies to realize profits from discrepancies between exchange rates prevailing at the same time in different markets, between forward margins for different maturities, or between interest rates prevailing at the same time in different markets or currencies.

(2) The process of buying foreign exchange, stocks, bonds, and other commodities in one market and immediately selling them in another market at a higher price.