You observe two quotes: Euro per dollar = 1 and Yen per dollar = 0.5....
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You observe two quotes: Euro per dollar = 1 and Yen per dollar = 0.5. That is, the implied cross-rate for Euro per Yen is 2. Suppose you also observe Euro per Yen = 2.2. The trading activity exploiting this difference is called: Covered interest arbitrage A. Forward trade B. Short sale C. Floating swap D. O O O E. Triangle arbitrage
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