When Parity Conditions Are Not in Effect in Currency and Money

question 16

Multiple Choice

When parity conditions are not in effect in currency and money markets,traders could make extraordinary profits from a practice known as ________.

• A) covered interest rate parity
• B) covered interest rate arbitrage
• C) triangular arbitrage
• D) forward market arbitrage

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Definitions:

Obsessive-Compulsive Disorder (OCD)

A mental health disorder characterized by persistent unwanted thoughts (obsessions) and repetitive behaviors or mental acts (compulsions).

Brain Abnormality

Any deviation from the normal structure or function of the brain that can lead to neurological or psychological disorders.

Genetics

The study of heredity and the variation of inherited characteristics.

Brain Chemistry

The complex interactions of neurotransmitters, hormones, and other chemical messengers that influence thoughts, emotions, and behavior.