Assume that $1 will purchase 0.60 and 108; that is, one U.S. dollar will purchase 0.6 UK
Question:
Assume that $1 will purchase £0.60 and ¥108; that is, one U.S. dollar will purchase 0.6 UK pounds and 108 Japanese yen. Assume that goods in the three countries are identically priced after adjusting for currency exchange rates and that there are no arbitrage opportunities.
a. What is the value of £1 in ¥?
b. What is the value of ¥1 in £?
c. If one ounce of gold costs $1500 in the United States, what is its cost in the UK and
in Japan?
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a The value of 1 is equal to the value of 6 Thus the value of 1 must be 106 16667 Since the val...View the full answer
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