Triangular Arbitrage Tends to Force a Relationship Between the Interest

question 20

True/False

Triangular arbitrage tends to force a relationship between the interest rates of two countries and their forward exchange rate premium or discount.

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Definitions:

Political Logrolling

A practice where politicians exchange favors by supporting each other’s proposed legislations or policies.

Median-Voter Model

A model in political science that suggests the outcome of a majority vote is most likely to represent the preferences of the median voter.

Paradox Of Voting

The situation where individual rational actors have little incentive to vote, considering their single vote is unlikely to change the outcome, yet voting occurs on a large scale.

Paradox Of Voting

The scenario where the cost of voting exceeds the expected benefits, leading to the rational abstention by individuals, despite collectively affecting the outcome.