How Has the Introduction of the Euro Affected Arbitrage

question 55

Multiple Choice

How has the introduction of the euro affected arbitrage?

• A) It has eliminated the possibility of arbitrage within Europe.
• B) It has eliminated the possibility of arbitrage based on exchange-rate differences within Europe.
• C) It has increased the possibilities for arbitrage within Europe.
• D) It has not affected the possibilities for arbitrage within Europe.

---

Definitions:

Voting Shares

Equity that grants the investor voting privileges on matters like board of directors' elections.

Cost Method

An accounting approach where investments are recorded at their acquisition cost, without recognizing any changes in market value until they are sold.

Investment Account

An account held at a financial institution or brokerage used to hold, manage, and track securities investments and transactions.

Voting Shares

Shares that give the shareholder the right to vote on company matters, such as the election of the board of directors.