At Current Exchange Rates It Takes 1

question 61

Multiple Choice

At current exchange rates it takes 1.3955 Canadian dollars to buy one euro (EUR) ,and 0.3188 Canadian dollars to buy one Malaysian ringgit (MYR) .What must the euro/ringgit exchange rate be in order to eliminate arbitrage opportunities?

• A)0.2284 EUR/MYR
• B)0.4449 EUR/MYR
• C)4.3774 EUR/MYR
• D)2.2478 EUR/MYR
• E)0.1639 EUR/MYR

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Definitions:

Confirmation Bias

A cognitive bias that involves favoring information that confirms pre-existing beliefs or ideas.

Nonconscious Processes

Mental processes that occur outside of conscious awareness.

Conscious Awareness

The state of being awake and aware of one's surroundings and thoughts.

Algorithm

A step-by-step procedure or formula for solving a problem, often used in computing and mathematical problem-solving.