If the Interest Rate Is Lower in the U

question 94

Multiple Choice

If the interest rate is lower in the U.S. than in the United Kingdom, and if the forward rate of the British pound is the same as its spot rate:

• A) U.S. investors could possibly benefit from covered interest arbitrage.
• B) British investors could possibly benefit from covered interest arbitrage.
• C) neither U.S. nor British investors could benefit from covered interest arbitrage.
• D) A and B

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Definitions:

Suppression

The act of stopping something by force, preventing the dissemination of information, or the expression of thoughts and activities.

Emotional Intelligence

The capacity to identify, comprehend, control, and logically deal with one's own emotions and those of others.

Self-Management

The ability to manage one's own behavior, emotions, and thoughts in a productive and healthy manner.

Cognitive Change

Alterations in thinking, intelligence, and problem-solving as a result of growth, learning, or experience.