Question: 13. Arbitrage: Covered interest 1. 2. 3 . 4. 5. STEP: 1 of 5 Which of the following best describes covered interest arbitrage? Using forward

13. Arbitrage: Covered interest 1. 2. 3 . 4. 5. STEP:

13. Arbitrage: Covered interest 1. 2. 3 . 4. 5. STEP: 1 of 5 Which of the following best describes covered interest arbitrage? Using forward contracts to mitigate interest rate risk, while attempting to capitalize on equal interest rates across countries Using forward contracts to mitigate exchange rate risk, while attempting to capitalize on higher interest rates in a particular country Using forward contracts to mitigate default risk, while attempting to capitalize on equal interest rates across countries Using forward contracts to mitigate default risk, while attempting to capitalize on higher interest rates in a particular country

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