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The price of a BMW is $33,000 in the United States and e28,000 in Germany. Where would you buy? Why? Assume one U.S. dollar buys

The price of a BMW is $33,000 in the United States and e28,000 in Germany.

Where would you buy? Why?

Assume one U.S. dollar buys e0.83. Is there any arbitrage opportunity? Where would you buy? Why?

Compute the no-arbitrage _e^$ exchange rate. At this exchange rate, where would you buy?

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