Spain's Two Great Bases in the New World Were the Viceregal

question 15

Multiple Choice

Spain's two great bases in the New World were the viceregal capitals of

• A) Lima and Mexico City
• B) Potosí and Lima
• C) Mexico City and Vera Cruz
• D) Lima and Vera Cruz

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Definitions:

Spot Rate

The current market price at which a particular asset can be bought or sold for immediate delivery and payment.

Covered Interest Arbitrage

A strategy in which an investor uses a forward contract to hedge against exchange rate risk when investing in foreign interest-bearing instruments.

Nominal Risk-Free Rate

The rate of return on the safest investments, such as government bonds, without adjusting for inflation.

Forward Rate

The future interest rate agreed upon in a forward contract, which is a derivative financial instrument.