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Which One of the Following Entails the Use of Computers

question 97

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Which one of the following entails the use of computers to monitor prices and also to submit trade orders in response to arbitrage opportunities?


Definitions:

Absolute Purchasing Power Parity

A theory stating that price levels between two countries should be equivalent, when expressed in a common currency, meaning the exchange rate between two currencies should equal the ratio of the countries' price levels.

Exchange Rate

The exchange rate specifies how much one currency can be traded for another, reflecting the relative values between them.

International Fisher Effect

A theory stating that the difference in nominal interest rates between two countries is equal to the expected change in exchange rates.

Expected Percentage Change

An estimation of the degree to which a specific variable such as price, cost, or investment value is anticipated to vary over a certain period.

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