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Suppose it is January 1980 and the USD/Deutsche Mark (DM) exchange rate is DM1 =0.91 and the DM/French Franc (FF) exchange rate is FF1=0.95. Assuming

image text in transcribed Suppose it is January 1980 and the USD/Deutsche Mark (DM) exchange rate is DM1 =0.91 and the DM/French Franc (FF) exchange rate is FF1=0.95. Assuming that no arbitrage opportunities exist, which of the following is closest to the FF/USD exchange rate? a. 0.9579 French francs per USD b. 1.0440 French francs per USD c. 0.8645 French francs per USD d. 1.1567 French francs per USD e. 1.0526 French francs per USD

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