If the Cross Exchange Rate of Two Nondollar Currencies Implied

question 73

True/False

If the cross exchange rate of two nondollar currencies implied by their individual spot rates with respect to the dollar is less than the cross exchange rate quoted by a bank, locational arbitrage is possible.

---

Definitions:

Flooding Hazards

Risks associated with excessive water, often due to heavy rainfall or river overflow, that can cause damage to structures and loss of life.

Mudslide Hazards

Risks associated with rapid downslope movement of soil and rock, often triggered by heavy rainfall or seismic activity.

Devils Tower

A striking volcanic rock formation located in the Black Hills of northeastern Wyoming, USA.

Magma Chamber

A large reservoir in the crust or mantle that is occupied by a body of magma.