A Trader Who Simultaneously Bought Swiss Francs in New York

question 75

Multiple Choice

A trader who simultaneously bought Swiss francs in New York for 1.0222 and sold them in Zurich for 1.0233 would be practicing

• A) simple arbitrage.
• B) inside trading.
• C) compound arbitrage.
• D) parity exploitation.

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Definitions:

Rejection Region

The range of values in hypothesis testing that, if the test statistic falls within, leads to the rejection of the null hypothesis.

Normal Population

A population with a distribution that follows a normal curve, characterized by symmetrical, bell-shaped graph.

Standard Deviation

A measure of the dispersion or variability within a dataset, quantifying the average distance of each data point from the mean.

Test Statistic

A calculated value from sample data used to assess the credibility of a hypothesis in statistics.