If the Euro/$ U

question 32

Multiple Choice

If the euro/$ U.S.exchange rate is 1.1€/$ in New York but 1.05€/$ in London, we should see:

• A)People selling $ and buying euros in New York and then selling those euros and buying $ in London
• B)People selling euros and buying $ in New York and then buying euros by selling $ in London
• C)The price differential between the markets increase as people seek to take advantage of the situation
• D)The $ should appreciate in New York relative to the euro

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Definitions:

Assets

Resources owned by a business or individual that have economic value or potential to provide future benefits.

Liabilities

Financial obligations or debts that an individual or company owes to others, which must be settled over time through the transfer of economic benefits including money, goods, or services.

Retail Establishment

A business location that sells products or services directly to consumers for personal or household consumption.

Current Owner

The individual or entity that currently holds ownership rights over a business, property, or asset.