Arbitrage opportunities exist when uncovered interest rate parity does not hold
Indicate whether the statement is true or false
FALSE
Explanation: Carry trade involves risk. Arbitrage opportunities may appear when transactions costs are low and covered interest rate parity does not hold.
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Answer the following statements true (T) or false (F)
1. In a purely competitive labor market, an individual firm must pay a rising price for labor if it wants to acquire more labor. 2. If a firm must pay a daily wage of $35 to hire 11 workers, and a daily wage of $40 to hire 12 workers, its marginal resource cost of hiring the twelfth worker is $40. 3. A monopsonist in the labor market tends to hire more workers than would be hired if the labor market were purely competitive. 4. A monopsonist faces an upsloping supply curve of labor, but it could face a horizontal demand curve for its product in the output market.
The total indebtedness of the federal government in the form of outstanding interest-earning bonds is the
A) budget surplus. B) trade deficit. C) national debt. D) budget deficit.