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Because of the Threat of Arbitrage,the Forward Rate Must Equal

question 38

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Because of the threat of arbitrage,the forward rate must equal the spot rate at all times.

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Definitions:

South Africa

A country located at the southernmost tip of Africa, known for its diverse culture, languages, and landscapes, as well as its rich history.

Price of Beef

The amount of money required to purchase a specific quantity of beef in a market.

Argentina

A country located in the southern half of South America, known for its diverse geography and rich cultural history.

Autarky Price

The price of a good or service within a country that is self-sufficient and does not engage in international trade for that good or service.

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