In an Efficient Market Without Barriers to Capital Flows,the Cost-Savings

question 70

Multiple Choice

In an efficient market without barriers to capital flows,the cost-savings argument of the QSD is difficult to accept,because

• A)it implies that an arbitrage opportunity exists because of some mispricing of the default risk premiums on different types of debt instruments.
• B)it implies that an arbitrage opportunity exists because of some mispricing of the exchange rates on different maturities of forward contracts.
• C)it implies that an arbitrage opportunity exists because of some mispricing of the default risk premiums on different types of debt instruments,and it implies that an arbitrage opportunity exists because of some mispricing of the exchange rates on different maturities of forward contracts.
• D)none of the options

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Definitions:

Bipolar Disorder

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Manic Phase

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