When the Cross Rate for Currencies Offered by Two Banks

question 26

True/False

When the cross rate for currencies offered by two banks differs from the exchange rate offered by a third bank, a triangular arbitrage opportunity exists.

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Definitions:

Comparative Advantage

The ability of an entity to produce a good or offer a service at a lower opportunity cost than its competitors, leading to more efficient international trade.

Trade Act of 2002

A legislative measure enacted in the United States aimed at facilitating trade and strengthening the economy through various provisions.

Electronically Submit

The process of sending documents or information through electronic means, such as email or web-based platforms.

Transportation Services

Industry sector focused on moving people or goods from one place to another via various modes such as trucks, trains, ships, and airplanes.