How has the introduction of the euro affected arbitrage?
A) It has eliminated the possibility of arbitrage within Europe.
B) It has eliminated the possibility of arbitrage based on exchange-rate differences within Europe.
C) It has increased the possibilities for arbitrage within Europe.
D) It has not affected the possibilities for arbitrage within Europe.

Question

Quizplus · Accepted Answer

With the introduction of the euro, there is one common currency throughout Europe, which means there are no longer exchange-rate differences to exploit in arbitrage opportunities. This has eliminated the possibility of arbitrage based on exchange-rate differences within Europe. However, other types of arbitrage opportunities may still exist.

How Has the Introduction of the Euro Affected Arbitrage