The Euro/dollar Exchange Rate Is €1 = $1

question 115

Multiple Choice

The euro/dollar exchange rate is €1 = $1.20.If a trader buys a camera that retails for $300 in New York and sells it for €200 in Berlin (ignoring transaction costs,transportation costs,or trade barriers) ,this represents a potential profit (arbitrage) of _____.

• A) $60
• B) $80
• C) $20
• D) $100
• E) $40

---

Definitions:

Tangible Asset

An asset that has physical form and value, such as equipment or real estate.

Economic Benefits

The advantageous gains obtained from resources or actions, including income, profits, or intangible assets like brand reputation.

Fair Value

The expected price for unloading an asset or the charge for relocating a liability in an orderly market transaction at the reckoning time.

Identifiable Assets

Identifiable assets are company assets that can be separated from the entity, sold, transferred, licensed, rented, or exchanged, either individually or together with a related contract.