A Trader Who Simultaneously Bought Swiss Francs in New York

question 13

Multiple Choice

A trader who simultaneously bought Swiss francs in New York for .9772 and sold them in Zurich for .9774 would be practicing

• A)simple arbitrage.
• B)inside trading.
• C)compound arbitrage.
• D)parity exploitation.

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Definitions:

Dividends

Capital paid by a corporation to its shareholders, mostly extracted from the enterprise's earnings.

Required Rate

The minimum return an investor expects to achieve by investing in a project or purchasing an asset, often used in capital budgeting to evaluate potential investments.

Growth Rate

The rate at which a company's sales, earnings, dividends, or other key metrics increase over a specified period of time.

Annual Dividend

The annual sum of dividends received by a shareholder for each share of stock owned.