Tom Takes 20 Minutes to Cook an Egg and 5

question 131

Multiple Choice

Tom takes 20 minutes to cook an egg and 5 minutes to make a sandwich. Jerry takes 15 minutes to cook an egg and 3 minutes to make a sandwich. If Tom and Jerry specialize and trade eggs and sandwiches with each other,

• A)Tom benefits but Jerry does not.
• B)Jerry benefits but Tom does not.
• C)neither Tom nor Jerry benefit.
• D)either Tom or Jerry benefit but we don't have enough information to know which one benefits.
• E)both of them benefit.

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Definitions:

Foreign Currency

Currency used in a country other than the home country of the business entity, often involved in international transactions.

Foreign Exchange Gain

A profit resulting from changes in exchange rates when foreign currency holdings are valued at the current exchange rate.

Exchange Rates

The rate at which one currency can be exchanged for another, defining the relative value between two currencies.

Forward Rate

A term used in finance to describe the future exchange rate agreed upon in a forward contract, or the future interest rates as implied by the yield curve.