Assume the cross rate is off. Explain what you can do to exploit this situation
What will be an ideal response?
Answer: You can perform triangular arbitrage and increase your wealth without risk. If the quoted cross rate is below the implied cross rate, you will convert currencies to take advantage of the undervalued exchange rate. If the quoted cross rate is higher than the verified cross rate, you will need to convert currencies to take advantage of this overvalued exchange rate.
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Consider Table 4.1. Prior to the tariff, domestic value added equals
a. $25. b. $50. c. $75. d. $100.
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Indicate whether the statement is true or false
The most powerful trend in ERP is likely to be?
a. RFID b. Lean management c. Manual inventory tracking d. Cloud computing
A company bought new heating system for $42,000 and was given a trade-in of $2,000 on an old heating system, so the company paid $40,000 cash with the trade-in. The old system had an original cost of $37,000 and accumulated depreciation of $34,000. If the transaction has commercial substance, the company should record the new heating system at:
A. $43,000. B. $40,000. C. $2,000. D. $3,000. E. $42,000.