Consider the Following Spot Exchange Rates: $1

question 11

Multiple Choice

Consider the following spot exchange rates: $1.60/£,¥105/$,€1.6/$,and L2,020/$.Which of the following seems to violate the law of one price if gold sells for $290 per ounce in the United States?

• A) 1 troy oz. gold = £181.25
• B) 1 troy oz. gold = ¥30,450
• C) 1 troy oz. gold = €405
• D) 1 troy oz. gold = L585,800

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