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A Corporation Dealing in Foreign Exchange May Desire to Obtain

question 4

Multiple Choice

A corporation dealing in foreign exchange may desire to obtain an exchange quote between the pound and franc, whose values are both expressed relative to the dollar.____ are used to determine such a relationship.


Definitions:

Comparative Advantage

The ability of a country or firm to produce a particular good or service at a lower opportunity cost than its competitors.

Absolute Advantage

The ability of an entity to produce more of a good or service with the same amount of resources than another entity.

Opportunity Cost

The price paid for not selecting the best available alternative when deciding.

Bushel

A unit of volume that is used primarily in the United States to measure agricultural commodities, equivalent to approximately 35.24 liters.

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