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Assume the law of one price holds. The exchange rate is $1.5 = 1. 1. If a sweater sells for $45 in New York, what

Assume the law of one price holds. The exchange rate is $1.5 = 1.

1. If a sweater sells for $45 in New York, what is its price (in ) in London?

2. What kind of possible arbitrage might occur if the sweater sells for 28 in London?

3. What kind of possible arbitrage might occur if the sweater sells for 35 in London?

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