With Covered Interest Arbitrage

question 48

Multiple Choice

With covered interest arbitrage:

• A) the market must be out of equilibrium.
• B) a "riskless" arbitrage opportunity exists.
• C) the arbitrageur trades in both the spot and future currency exchange markets.
• D) all of the above

Analyze the current state of business ethics in the 21st century.

Comprehend why investors are concerned with business ethics.

Understand the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act on financial services industry responsibility.

Recognize the foundational principles of business ethics initiatives like the Defense Industry Initiative.

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Definitions:

Pleasure Principle

The driving force of the id that seeks immediate gratification of all desires, wants, and needs.

Drive Reduction

A theory in psychology suggesting that behavior is motivated by the desire to reduce internal tension caused by unmet biological needs.

Incentives

Rewards or stimuli that motivate individuals to perform a certain action or exhibit a desired behavior.

Satisfaction

The fulfillment or gratification of a desire, need, or appetite, or the pleasure derived from this fulfillment.