1. A foreign currency will, on average, depreciate against the U.S. dollar at a percentage rate approximately equal to the amount by which its inflation rate exceeds that of the United States." True or false?
2. Based on the following information, is there an arbitrage opportunity? If yes, what is the profit in terms of a percentage? For the euro, Bank A: $1.2-1.23 Bank B: $1.25-1.28 Select one:
a. Yes, 1.57%.
b. No.
c. Yes, 1.68%.
d. Yes, 1.63%.
e. Yes, 1.52%