Hi,

Could you please help me answer the questions below? I need the correct answer, and if possible, a brief explanation. Thanks very much :)

1.The price elasticity of demand for gaming players manufactured in China is greater than one. If the Chinese Renminbi appreciates against the U.S. dollar by 10% and the price of the gaming players in the U.S also rises by 10%, then all other things being equal, the total dollar sales revenues of gaming players would ________.

A) decline

B) increase

C) stay the same

D) There is not enough information to answer this question.

2.Covered interest arbitrage moves the market ________ equilibrium because ________.

A) toward; investors are now more willing to invest in risky securities

B) toward; purchasing a currency on the spot market and selling in the forward market narrows the differential between the two

C) away from; purchasing a currency on the spot market and selling in the forward market increases the differential between the two

D) away from; demand for the stronger currency forces up interest rates on the weaker security

3.According to the theory of interest rate parity, the difference in national interest rates for securities of similar risk and maturity should be ________ and ________ sign to the forward rate discount or premium for the foreign currency, except for transaction costs.

A) less than; of the same

B) equal to; of the same

C) equal to; opposite in

D) greater than; opposite in