Which of the Following Is an Example of Triangular Arbitrage

question 3

Multiple Choice

Which of the following is an example of triangular arbitrage initiation?

• A) buying a currency at one bank's ask and selling at another bank's bid, which is higher than the former bank's ask.
• B) buying Singapore dollars from a bank (quoted at $.55) that has quoted the South African rand (SAR)/Singapore dollar (S$) exchange rate at SAR2.50 when the spot rate for the rand is $.20.
• C) buying Singapore dollars from a bank (quoted at $.55) that has quoted the South African rand/Singapore dollar exchange rate at SAR3.00 when the spot rate for the rand is $.20.
• D) converting funds to a foreign currency and investing the funds overseas.

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Definitions:

Adaptability

The capacity to adjust to changing conditions or environments, demonstrating flexibility and resilience.

Slow-To-Warm-Up

A temperament where individuals are hesitant in new situations but become more comfortable over time.

Temperament

An individual's innate disposition or personality, often observable from early childhood and influencing behavior and emotional reactions.

Uncrowded

Refers to a situation or environment that is not filled or packed with people, offering more space and less congestion.