Currency Arbitrage Refers to The

question 55

Multiple Choice

Currency arbitrage refers to the:

• A)conversion of one currency into another.
• B)technique of protecting against the potential losses that result from adverse changes in exchange rates.
• C)simultaneous and instantaneous purchase and sale of a currency for a profit.
• D)price at which a bank or a financial services firm is willing to sell a currency.
• E)practice of buying and selling a currency with the expectation that the value will change and result in a profit.

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Definitions:

Functional Fixedness

A cognitive bias that limits a person's ability to use an object only in the way it is traditionally used.

Confirmation Bias

The habit of looking for, interpreting, prioritizing, and recalling data in a way that reinforces one's already held convictions or assumptions.

Gamble

The act of risking something of value on the outcome of an event in the hope of gaining something of greater value.

Hypotheses Forming

The process of creating an educated guess or proposition that attempts to explain certain phenomena or relationships, which can be tested through research or experimentation.