Which of the Following Is NOT True with Respect to Interest

question 39

Multiple Choice

Which of the following is NOT true with respect to interest rate arbitrage?

• A) Interest rate arbitrage maintains the interest rate parity relationship.
• B) To arbitrage, you buy and sell something so that you have a positive investment and then earn a return on the transaction.
• C) It is rare that similar risk investments in one country earn more than another country after converting money to and from the foreign currency using spot and forward exchange rates.
• D) Arbitrageurs help exchange rates adjust to their correct levels rapidly and accurately.
• E) All of the above are true.

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Definitions:

Settled Agriculture

The practice of farming on permanent plots of land, allowing for the development of more stable and sustainable agricultural communities.

Complex Civilizations

Societies with highly developed cultural, political, and economic systems, characterized by urban development, social stratification, and forms of government.

Accumulating Wealth

The process of amassing resources or assets of value over time, typically for the purpose of securing financial stability or achieving economic power.

Algonquians

A group of Native American peoples speaking Algonquian languages, widespread across North America, particularly in the northeastern region.