Triangle Arbitrage: I

question 9

Multiple Choice

Triangle arbitrage: I. is a profitable situation involving three separate currency exchange transactions.
II) helps keep the currency market in equilibrium.
III) opportunities can exist in either the spot or the forward market.
IV) only involves currencies other than the U.S. dollar.

• A) I and IV only
• B) II and III only
• C) I, II, and III only
• D) II, III, and IV only
• E) I, II, III, and IV

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Definitions:

Assets

The resources owned by a business.

Sales

The total amount of revenue generated from selling goods or services over a specific period.

Other Income

Income derived from activities that are not part of a company’s primary business operations.

Operating Activity

Operating activity involves the primary functions of a business that relate to its provision of goods and services to the market.