1. Which term best applies to the situation where an investor cares less about losing $1 of his profits than he does about losing $1 of his original investment?
get-evenitis
familiarity
house money effect
snakebite effect
home bias
2. Cher has $10,000. The following quotations are available to her for US dollars ($), Convertible Marka (KM), and Swiss Francs (SF). She may either buy or sell at the stated rates:
U.S. Bank:$2.00/SF
Bosnia Bank:$4.20/KM
Swiss Bank:SF2.40/KM
What is Cher’s arbitrage profit assuming a triangle arbitrage is possible? (Round answer to nearest whole number.)