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1. The price of a BMW is $33,000 in the United States and 28,000 in Germany. (a) Where would you buy? Why? (b) According to

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1. The price of a BMW is $33,000 in the United States and 28,000 in Germany. (a) Where would you buy? Why? (b) According to the Law of One Price, what is the exchange rate that ensures no arbitrage? At this exchange rate, where would you buy? (c) Assume one U.S. dollar buys 0.83. Is there any arbitrage opportunity? Where would you buy? Why

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