Arbitrage in the Foreign Exchange Market and International Loans Markets

question 120

Multiple Choice

Arbitrage in the foreign exchange market and international loans markets and goods markets achieves all of the following except

• A)the law of one price.
• B)no round-trip profit.
• C)interest rate parity.
• D)purchasing power parity.
• E)depreciation across all currencies.

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Definitions:

Parameter

A characteristic or constant factor that can be measured and used to describe a system or set the conditions of an experiment.

Statistic

A numerical value that represents a summary measure of a sample, used to estimate parameters of the population.

Commuting Distance

The distance that an individual travels from their home to their place of work or study.

Parameter

A numerical characteristic or measure that describes and summarizes a whole population.