2 Covered Interest arbitrage can occur a. only when three or more currencies are used b. If Interest rate parity does not exist c. only when interest rates in two countries are significantly different d but locational arbitrage cannot occur at the same time 3. If U.S. Inflation suddenly increased while European Inflation stayed the same, there would be: a. an increased U.S. demand for euros and an increased supply of euros for sale. b. a decreased U.S. demand for euros and an increased supply of ouros for sale. c. a decreased U.S. demand for euros and a decreased supply of euros for sale. d. an increased U.S. demand for euros and a decreased supply of euros for sale