The Current Exchange Rate Between the Swiss Franc and the U.S

question 8

Multiple Choice

The current exchange rate between the Swiss franc and the U.S. dollar is $0.9107/S.F. If a pair of jeans costs $50.00 in the U.S. and purchasing power parity holds, what would you expect
This same pair of jeans to sell for in Switzerland?

• A)S.F. 54.90
• B)S.F. 49.09
• C)S.F. 45.54
• D)This cannot be answered without knowing the inflation rates for each country.

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Definitions:

Interest Rate

The cost of borrowing money or the return on savings, usually expressed as a percentage.

Interest Rate

The percent of principal charged by the lender for the use of its money or the rate earned on deposited funds.

Revenues

Revenues are the total amount of money generated by a company from its business activities, such as the sale of goods or services, before any costs or expenses are deducted.

Interest Rate

The interest rate is the cost of borrowing money or the return earned from lending money, typically expressed as a percentage of the principal amount per year.