Which of the Following Is an Example of Triangular Arbitrage

question 52

Multiple Choice

Which of the following is an example of triangular arbitrage initiation?​

• A) ​buying a currency at one bank's ask and selling at another bank's bid, which is higher than the former bank's ask
• B) ​buying Singapore dollars from a bank (quoted at $.55) that has quoted the South African rand (SAR)/Singapore dollar (S$) exchange rate at SAR2.50 when the spot rate for the rand is $.20
• C) ​buying Singapore dollars from a bank (quoted at $.55) that has quoted the South African rand/Singapore dollar exchange rate at SAR3.00 when the spot rate for the rand is $.20
• D) ​converting funds to a foreign currency and investing the funds overseas

---

Definitions:

Marginal Revenue Curve

A graphical representation showing how marginal revenue varies with changes in the quantity of output produced.

Barriers to Market Entry

Obstacles that make it difficult for a new firm to enter an industry, which might include high start-up costs, strict regulations, or established brand loyalty.

Public Utilities

Companies that provide essential services like water, electricity, natural gas, and telecommunications to the public, often under government regulation.

Political Power

The ability to influence or outright control the behavior of people and institutions, often within a governmental context.