Question
Currencies U.S. dollar foreign-exchange rates. May 5, 2011 Country/currency..in US$..............per US$ British Pound.1.5347.0.6516 Norwegian Kroner.0.1690..5.9173 Thai Baht..0.0310..32.250 The price of an ounce of gold in
Currencies U.S. dollar foreign-exchange rates. May 5, 2011
Country/currency..in US$..............per US$
British Pound.1.5347.0.6516
Norwegian Kroner.0.1690..5.9173
Thai Baht..0.0310..32.250
The price of an ounce of gold in New York is $1,950, and the price of the same ounce of gold in London is 1,285 British Pounds. Using the exchange rates above, what would you predict would occur in well-functioning markets based upon this information?
| a. | The price of gold will fall in New York and will stay the same in London | |
| b. | The price of gold will stay the same in both New York and London | |
| c. | The price of gold will rise in New York and fall in London | |
| d. | The price of gold will fall in New York and rise in London | |
| e. | The price of gold will rise in New York and will stay the same in London |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started