Which of the Following Is an Example of Interest Arbitrage

question 21

Multiple Choice

Which of the following is an example of interest arbitrage?

• A)investing in debt instruments in different currencies or different countries
• B)selling U.S. dollars for Swiss francs, then selling Swiss francs for British pounds, then selling British pounds for U.S. dollars
• C)investigating different commercial banks to find the best exchange rate
• D)an American investing in a London-based company

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Definitions:

Aptitude Test

A standardized test designed to measure an individual's potential to acquire specific skills or knowledge.

Ravens' Progressive Matrices

A nonverbal group test typically used to measure abstract reasoning and regarded as a test of fluid intelligence.

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The information that is already known by an individual, which helps in understanding new information.

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An assessment of whether a test measures what it’s intended to measure, based on whether the test score correlates with another relevant criterion measured later.