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Question
Exchange rates are 150 yen per dollar, 0.8 euro per dollar, and 20 pesos per dollar. A bottle of beer in New York costs 6 dollars, 1,200 yen in Tokyo, 7 euro in Munich, and 100 pesos in Cancun. Where is the most expensive beer?
a. Tokyo
b. Munich
c. New York
d. Cancun
Answer
This answer is hidden. It contains 1 characters.
Related questions
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Risk premium equals to:a. expected premium minus forward premium.b. expected premium plus forward premium.c. forward premium minus expected premium.d. exchange rate premium plus forward premium.
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Considering the internal balance in an economy, which of the following could lead to lower interest rate and higher income?
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In foreign exchange forecasting, what is a good forecast?
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c. When the forecast is high.
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Suppose for two currencies the forward premium is 4% and the expected premium is 8%. Then the risk premium is:
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A U.S. firm has a 1 million payment due to a Dutch firm in 90 days. The current spot rate is $1.00 per euro, and the 90-day forward rate is $1.11. Ben forecasts that the spot rate in 90 days will be $0.99. Jerry forecasts that the spot rate will be $1.12 in 90 days. The actual spot rate in 90 days turns out to be $1.10. Whose advice, between Ben and Jerry, will save the companys money?
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b. 5%
c. 6.67%
d. 12.5%