Many economists conclude that, although there may be predictable excess returns from risky arbitrage in foreign exchange markets, the reward-risk ratio:
A) is too low to attract additional investors.
B) is too high to attract additional investors.
C) varies too much to attract additional investors.
D) is too random to attract additional investors.

Question

Quizplus · Accepted Answer

The statement implies that although there may be excess returns from risky arbitrage in foreign exchange markets, the reward-risk ratio is too low to attract additional investors. Therefore, option A is the best choice, as it directly addresses this conclusion.

Many Economists Conclude That, Although There May Be Predictable Excess