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Which of the Below Statements Is FALSE

Question 27

Multiple Choice

Which of the below statements is FALSE?


A) In the real world, it is rare that the theoretical cross rate, as computed from actual dealer dollar exchange rate quotes, will differ from the actual cross rate quoted by dealers.
B) Arbitraging to take advantage of cross-rate mispricing is called triangular arbitrage, so named because it involves positions in three currencies.
C) The arbitrage keeps actual cross rates dissimilar to theoretical cross rates.
D) Barring any government restrictions, riskless arbitrage will assure that the exchange rate between two countries will be the same in both countries.

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