Arbitrage is a business/finance word that some people have difficulties understanding so here's a good example of it.
Mr X is currently in Dubai and he has a business in Saudi Arabia. He is runnning a transport company in Saudi where the cost of Mercedes trucks has increased significantly recently. Mr X believes that the price of Mercedes trucks in Dubai can be bought at a major discount vis a vis Saudi.he says that if he can buy the truck he wants in Dubai for $10,000 less than in Saudi he will buy it. If not, he won't!
Dealing in goods and services where difference prices exist in different areas/markets is known as arbitrage.
Duncan Williamson
No comments:
Post a Comment