Triangle Arbitrage: I.is a Profitable Situation Involving Three Separate Currency Exchange Transactions

Triangle arbitrage:
I.is a profitable situation involving three separate currency exchange transactions.
II.helps keep the currency market in equilibrium.
III.opportunities can exist in either the spot or the forward market.
IV.is based solely on differences in exchange ratios between spot and futures markets.

A) I and IV only
B) II and III only
C) I, II, and III only
D) II, III, and IV only
E) I, II, III, and IV

Correct Answer:

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