Locational Arbitrage Explains Why Spot Exchange Rates Among Banks at Different

question 64

True/False

Locational arbitrage explains why spot exchange rates among banks at different locations normally will not differ by a significant amount.

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Definitions:

Aversion Conditioning

A method of learning involving a negative or unpleasant stimulus to create a dislike for a particular behavior.

Imprinting

A rapid learning process occurring early in the life of a social animal, where it forms an attachment to a particular object or organism.

Goslings

Young geese; in a developmental context, the term often illustrates principles of imprinting and early learning.

Ducklings

Ducklings are the young of ducks; in psychology, they are often used in imprinting studies, which show how they can form attachments during a critical period early in life.