Ask Question
BusinessBusiness
4 May, 20:04

f interest rate parity (IRP) exists, then triangular arbitrage will not be possible. A. true. B. false.

+1
Answers (1)
  1. 4 May, 23:07
    0
    A. True

    Explanation:

    Arbitrage refers to a situation wherein a gain is made owing to price discrepancy or unevenness in two markets. The rule for arbitrage is to buy from the markets where price is less and sell in the markets where price is higher.

    Triangular arbitrage occurs wherein 3 different currencies are involved and the exchange rates are not uniform i. e a discrepancy exists and interest rate parity does not hold true.

    Interest rate parity refers to the concept wherein the disparity between two currency exchange rates is adjusted by the respective interest rates of the two countries. When interest rate parity exists, no arbitrage is possible as markets are fairly priced.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “f interest rate parity (IRP) exists, then triangular arbitrage will not be possible. A. true. B. false. ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers
You Might be Interested in
The long-run supply curve for a competitive industry a. may be horizontal if entry into the industry lowers average total cost. b. may be upward-sloping if higher-cost firms enter the industry. c.
Answers (1)
What does GDP stand for?
Answers (2)
a company is considering the purchase of a new machine. The cost of the machine is $70,000. the annual cash flow are: 1 year $13,000; 2 year $24,000; 3 year $33,000; 4 year $21000, a) if the cost of capital is 8%.
Answers (1)
If the federal and state minimal wages are different, the highest minimum wages used True False
Answers (2)
In-line industries (ili) produces recreational in-line skates. demand is seasonal, peaking in the
Answers (1)
New Questions in Business
When Japan exports goods to the United States, which Country shows a balance of payments credit
Answers (1)
Love Company's accounting records show an after-closing balance of $42,100 in its Retained Earnings account on December 31, 2018.
Answers (1)
g If government spending rises at the same time it reduces tax rates, then:Group of answer choicesbusiness investment will likely fall. crowding out will never occur. interest rates will never rise. business investment will likely rise.
Answers (1)
Wages of $8,000 are earned by workers but not paid as of december 31, 2017. depreciation on the company's equipment for 2017 is $18,000. the office supplies account had a $240 debit balance on december 31, 2016.
Answers (1)
You have placed an antique sofa up for auction and the auctioneer has not made any special announcements about the sale. You can withdraw the sofa at any time before the auctioneer closes the sale by announcement or by the fall of the hammer.
Answers (1)
Home » Business » f interest rate parity (IRP) exists, then triangular arbitrage will not be possible. A. true. B. false.
Sign Up Forgot Password?