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3 years ago

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

Business

1 answer:

Levart [38]3 years ago

3 0

Answer:

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.

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3 years ago

A corporation issued 6,200 shares of $10 par value common stock in exchange for some land with a market value of $94,000. The en

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Answer:

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3 years ago

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3 years ago

Hicks health clubs, inc., expects to generate an annual ebit of $505,000 and needs to obtain financing for $1,080,000 of assets.

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3 years ago

Two months ago, Lisa was honorably discharged from the Air Force where she spent four years training as an airplane mechanic. Af

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Answer:

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$1,506.40

Explanation:

a) Data and Calculations:

Lisa works 40 hours at $18 an hour

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Dave weekly income = $625

Dave's monthly income = $625 * 4 = 2,500

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b) If Lisa and Dave, her husband, file jointly for taxes, then the maximum mortgage payment (PITI) they can make is 28% of the gross income.

Therefore PITI = $5,380 * 28% = $1,506.40

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3 years ago