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:

IPA

India Pale Ale, a style of beer characterized by a higher proportion of hops which originally preserved it for the long voyage from England to India.

HMO

A Health Maintenance Organization, a type of health insurance plan that restricts coverage to care from doctors who work for or contract with the HMO.

PPO

Preferred Provider Organization, a healthcare plan that offers members reduced rates if they choose healthcare providers from within a prescribed network.

Contracted Services

Professional services provided by an outside party under the terms of a contractual agreement.