Scenario: Sam Dearing, Budding International Financier

Scenario: Sam Dearing, Budding International Financier
Sam Dearing is a summer intern in the arbitrage department at a prestigious Wall Street firm. Sam is hoping to be offered a full-time position at the firm after he graduates from college, and therefore, Sam knows that he must demonstrate a strong understanding of how exchange rates work.
-Sam already knows that the ________ tells us the value of one country's currency we must pay to receive a certain amount of another.

A) exchange rate
B) par value
C) law of one price
D) purchasing power parity theory