OMR is quoted against USD and EURO. Under which of the following condition will the trader have a possibility of arbitrage? a. When the calculated cross rate of USD/EURO is different from Quoted cross rate b. When calculated cross rate of OMR/EUR is different from Quoted cross rate c. When calculated cross rate of OMR/USD is greater than quoted rate d. When calculated cross rate of USD/EUR is equal to Quoted cross rate

OMR is quoted against USD and EURO. Under which of the following condition will the trader have a possibility of arbitrage? a. When the calculated cross rate of USD/EURO is different from Quoted cross rate b. When calculated cross rate of OMR/EUR is different from Quoted cross rate c. When calculated cross rate of OMR/USD is greater than quoted rate d. When calculated cross rate of USD/EUR is equal to Quoted cross rate

International Financial Management

14th Edition

ISBN:9780357130698

Author:Madura

Publisher:Madura

Chapter20: Short-term Financing

Section: Chapter Questions

Problem 2QA

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Question

OMR is quoted against USD and EURO. Under which of the following condition will the trader have a possibility of arbitrage?

When the calculated cross rate of USD/EURO is different from Quoted cross rate

When calculated cross rate of OMR/EUR is different from Quoted cross rate

When calculated cross rate of OMR/USD is greater than quoted rate

When calculated cross rate of USD/EUR is equal to Quoted cross rate

Which of the following is true about derivatives?

Value of derivative is derived from predetermined asset

The terms and conditions are flexible under derivative trading

Derivative markets are suitable for low risk investors

Risk on derivatives market are always low

Which of the following condition may indicate that OMR has depreciated to EUR?

Spot rate of EUR/OMR is equal to future rate of OMR/EUR

Spot rate of EUR/OMR is less than future rate of EUR/OMR

None

Future rate of EUR/OMR is equal to spot rate of OMR/EUR

Future rate of OMR/EUR is less than Spot rate of OMR/EUR

Definition Video Definition Accounting method wherein the cost of a tangible asset is spread over the asset's useful life. Depreciation usually denotes how much of the asset's value has been used up and is usually considered an operating expense. Depreciation occurs through normal wear and tear, obsolescence, accidents, etc. Video

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