COVERED Interest Arbitrage (CIA), Is Where Investors Borrow in Countries

question 17

True/False

COVERED interest arbitrage (CIA), is where investors borrow in countries and currencies exhibiting relatively low interest rates and convert the proceeds into currencies that offer much higher interest rates. The transaction is "covered," because the investor does not sell the higher yielding currency proceeds forward.

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Definitions:

Caviar Among Drugs

A colloquial term likely referring to a highly expensive and sought-after illegal drug, comparing its exclusivity and luxury status to that of caviar in the food world.

Ethnic Group

refers to a community or population made up of people who share a common cultural background or descent, which can include traditions, language, and often a shared ancestry.

Moderate Drinking

The consumption of alcohol within limits considered to be low-risk or without causing harm to health and well-being.

Getting Drunk

The act of consuming alcohol to the extent that it significantly impairs physical and mental functions.