Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Use the data in the table below to answer the following 3 questions. Currencies U.S. dollar foreign-exchange rates. December 15, 2015 Country/currency in US$ per

Use the data in the table below to answer the following 3 questions.

Currencies U.S. dollar foreign-exchange rates. December 15, 2015

Country/currency in US$ per US$

British Pound 1.53468 0.6516

Norwegian Kroner 0.16900 5.9173

Thai Baht 0.03100 32.250

Suppose a Big Mac costs $3.27 in Boston, and 101 Thai Baht in Thailand. In this circumstance, what can we say is TRUE?

A. Purchasing Power Parity holds, and Big Macs are relatively cheap in Thailand

B. Purchasing Power Parity holds, and Big Macs are relatively expensive in Thailand

C. Purchasing Power Parity holds, and Big Macs cost the same in these two cities

D. Purchasing Power Parity does not hold, and Big Macs are relatively cheap in Thailand

E. Purchasing Power Parity does not hold, and Big Macs are relatively expensive in Thailand

Shelly is currently in Oslos airport, about to fly to Thailand. She has 500 Norwegian Kroner in her wallet. Which of the following comes closest to the number of Thai Baht she can receive?

A. 16,125 B. 2,725 C. 954 D. 296 E. 92

30.The price of an ounce of gold in New York is $1,000, and the price of the same ounce of gold in London (Britain) IS 651.6 British Pounds. Using the exchange rates above, what would likely occur in well-functioning markets based upon this information?

A. The price of gold will rise in New York and fall in London B. The price of gold will rise in New York and will stay the same in London C. The price of gold will fall in New York and rise in London D. The price of gold will fall in New York and will stay the same in London E. The price of gold will stay the same in both New York and London

Please be thorough as if I was an idiot.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

International Financial Management

Authors: Cheol Eun, Bruce Resnick

5thEdition

0073382345, 9780073382340

More Books

Students also viewed these Finance questions