Consider the Following: If the Market Futures Price Is

question 31

Multiple Choice

Consider the following: If the market futures price is 1.69 A$/$, how could you arbitrage?

• A)Borrow Canadian dollars in Canada, convert them to dollars, lend the proceeds in the United States, and enter futures positions to purchase Canadian dollars at the current futures price.
• B)Borrow U.S.dollars in the United States, convert them to Canadian dollars, lend the proceeds in Canada, and enter futures positions to sell Canadian dollars at the current futures price.
• C)Borrow U.S.dollars in the United States, invest them in the U.S., and enter futures positions to purchase Canadian dollars at the current futures price.
• D)Borrow Canadian dollars in Canada and invest them there, then convert back to U.S.dollars at the spot price.

Comprehend FOB shipping point and FOB destination terms and their differences.

Calculate gross profit for a company.

Acknowledge the importance of tracking inventory activities in merchandising companies.

Recognize the period-end adjusting entries required under new revenue recognition standards.

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Definitions:

Preoperational

The second stage in Piaget's theory of cognitive development, characterized by symbolic thinking and egocentrism in children aged 2 to 7 years.

Intellectual Skills

Abilities related to thinking, reasoning, problem-solving, and learning.

Qualitative

Pertains to research or data that focuses on descriptions and characteristics that are observed but not measured.

Quantitative

Involving the measurement or assessment of quantities; relating to, measuring, or measured by the quantity of something.