Profit-Seeking Arbitrage Activity Ensures

question 43

Multiple Choice

Profit-seeking arbitrage activity ensures:

• A) Covered interest rate parity.
• B) Decreased competition.
• C) Higher interest rates on loans.
• D) Increased banking regulation.

---

Definitions:

Accounts Payable

Liabilities of a company or an individual due to creditors for goods and services received but not yet paid for.

Earnings Per Share

A measure of a company's profitability that is calculated by dividing its net earnings available to common shareholders by the average outstanding shares.

Common Stock

Represents equity ownership in a corporation, providing voting rights and entitling the holder to a share of the company's success through dividends and/or capital appreciation.

Fixed Asset Turnover

A financial ratio that measures a company's effectiveness in generating sales from its fixed assets.