The Effect of Arbitrage Activities in Foreign Exchange Markets Is

question 34

Multiple Choice

The effect of arbitrage activities in foreign exchange markets is to

• A) create disparity among the rates of various currencies.
• B) eliminate or reduce exchange rate quotation differentials.
• C) hinder the otherwise smooth functioning of the exchange markets.
• D) create wide swings in quotations from period to period.

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External Environment

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Interest Groups

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