FNAN 522 - CH. 21
Class Practice
Problems QUESTIONS
AND ANSWERS
A new coat costs 3,900 Russian rubles. How much will the identical
coat cost in Euros if absolute purchasing power parity exists and the
following exchange rates apply?
Country US Equivalent Currency per U.S. $
Russia ? 27.0520
Euro 1.2762 ?
€112.97
Assume you can buy 52 British pounds with 100 Canadian dollars.
How much profit can you earn on a triangle arbitrage given the
following rates if you start out with 100 U.S. dollars?
Country US Equivalent Currency per U.S. $
Class Practice
Problems QUESTIONS
AND ANSWERS
A new coat costs 3,900 Russian rubles. How much will the identical
coat cost in Euros if absolute purchasing power parity exists and the
following exchange rates apply?
Country US Equivalent Currency per U.S. $
Russia ? 27.0520
Euro 1.2762 ?
€112.97
Assume you can buy 52 British pounds with 100 Canadian dollars.
How much profit can you earn on a triangle arbitrage given the
following rates if you start out with 100 U.S. dollars?
Country US Equivalent Currency per U.S. $
