Arbitration of exchange -- A calculation based on rates of
exchange to determine the difference in money values at three
or more places ; or, a calculation based on the money values at
three or more places to determine the ratio of exchange between
the different places. Where three places are concerned
the calculation is called simple arbitration ; where more than
three places are concerned the calculation is called compound
arbitration. As an operation (as distinguished from a calculation) arbitration of exchange consists in dealing for profit in exchange
between three or more places. The profit is derived from
the difference in the rates of exchange on the several places.
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