Suppose $1 = 10.5 pesos in New York and $1 = 9.6 pesos in Mexico City.If you had $10,000 using arbitrage, your profits would be:
a. $937.50.
b. 937 pesos.
c. 9,600 pesos.
d. $790.
Ans: a. $937.50.
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A) lower nominal interest rates B) lower real interest rates C) reduced demand for bonds D) increased supply of bonds
Bonnie is a self employed. She makes floral arrangements in a building she rents. She owns the delivery vehicle and has hired a delivery driver. She is an example of
A) entrepreneurial ability. B) labor. C) physical capital. D) human capital.
An external shock such as a foreign country's devaluation will shift the
A. LM curve to the right. B. LM curve to the left. C. FE curve to the right. D. FE curve to the left.
Economic expansion and growth are the only objectives that U.S. policymakers consider when they implement tax, spending and financial policies that affect the U.S. economy.
Answer the following statement true (T) or false (F)