Solved

Suppose We Observe the Two Exchange Rates ×\times /US$ = 100, A$/US$ = 1

Question 54

Multiple Choice

Suppose we observe the two exchange rates: ×\times /US$ = 100, A$/US$ = 1.5. If the current cross-rate ( ×\times /A$) between ×\times and A$ is 50, which of the following is true?


A) The correct cross-rate ( ×\times /A$) should be 33.33
B) It costs less to buy ×\times with US$
C) An US$33.33 arbitrage profit can be realized
D) All of the above
E) None of above

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Unlock this Answer For Free Now!

View this answer and more for free by performing one of the following actions

qr-code

Scan the QR code to install the App and get 2 free unlocks

upload documents

Unlock quizzes for free by uploading documents