interpretation does not hold true in reduced-form SDF models that only rely on the absence of arbitrage in asset markets. In …

for foreign exchanges) data, it is found that risk-free arbitrage opportunities--free lunch--do occur in the foreign … pair and (b) triangular arbitrage relationship involving three currency pairs. The latter occur much more often than the … former. Such arbitrage opportunities tend to occur when the markets are active and volatile. Over the 12-year, tick …

. Theory consistent with dollar appreciation in the crisis suggests that their impact should be greater for countries that have …