A: Interest rate arbitrage refers to the behavior of borrowing similar assets at low interest rates in the financial market and then lending them at high interest rates. There are two main forms of interest rate arbitrage: (1) uncompensated arbitrage. It refers to the use of the interest rate difference between the two markets to transfer short-term funds from the market with lower interest rate to the market with higher interest rate for investment, so as to seek spread income. (2) Throw-and-fill arbitrage. Arbitrators transfer funds from place A to place B to obtain higher interest, and also sell forward B currency in the foreign exchange market to prevent risks.