Q.

Covered interest arbitrage involves both

A. the purchase of a foreign asset and a forward contract in the market for foreign exchange.
B. the purchase of a domestic asset and a spot contract in the market for foreign exchange.
C. the sale of a foreign asset and the purchase of a forward contract in the market for foreign exchange.
D. the sale of domestic stocks and the purchase of foreign bonds.
Answer» D. the sale of domestic stocks and the purchase of foreign bonds.
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