Which of the following is not the Arbitrage Rule of Thumb?

Question 11 options:

a)	If the difference in interest rate is greater than forward premium, then invest in the higher interest currency

b)	Covered interest arbitrage opportunities continue to hold until interest rate parity is re-established

c)	If the difference in interest rate is less than forward premium, then invest in the lower interest currency

d)	If the difference in interest rate is greater than forward premium, then invest in the lower interest currency

Which of the following statements is correct in relation to call option?

Question 12 options:

a)	Spot = Strike = Exercise

b)	Spot ? Strike = Lapse/Do not exercise

c)	Spot > Strike = Exercise

d)	Spot < Strike = Exercise

Answer rating: 100% (QA)

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