If the Quoted Cross Rate Between Two Foreign Currencies Is

question 59

True/False

If the quoted cross rate between two foreign currencies is not aligned with the two corresponding exchange rates, investors can profit from triangular arbitrage.

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Definitions:

Degeneration

The process of deterioration or decline in physical, mental, or moral qualities.

Conditioned Salivation

A reflex response where salivation is triggered by a stimulus that previously was associated with the presentation of food, famously studied by Pavlov.

Ivan Pavlov

A Russian physiologist known for his work in classical conditioning, demonstrating the learned response of dogs to stimuli associated with food.

Conceptualized

The process of forming a concept or idea by integrating various elements and perspectives into a coherent whole.