If Quoted Exchange Rates Are the Same Across Different Locations

question 87

Multiple Choice

If quoted exchange rates are the same across different locations, then ____ is not feasible.

• A) triangular arbitrage
• B) covered interest arbitrage
• C) locational arbitrage
• D) A and C

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Definitions:

Consumption

The usage of goods and services by households or individuals, forming a major component of aggregate demand in an economy.

Income

Income refers to the money received by an individual or entity, typically in the form of wages, salaries, or returns from investments, over a specified period of time.

Interest Rate

The amount charged, expressed as a percentage of principal, by a lender to a borrower for the use of assets.

Bushels

A unit of volume that is used for measuring agricultural produce, such as grain, fruit, or vegetables.