Suppose We Observe the Two Exchange Rates $\times$ /US$ = 100, A$/US$ = 1

question 62

Multiple Choice

Suppose we observe the two exchange rates: $\times$ /US$ = 100, A$/US$ = 1.5. If the current cross-rate ( $\times$ /A$) between $\times$ and A$ is 50, which of the following is true?

• A) The correct cross-rate (\(\times\)/A$) should be 33.33
• B) It costs less to buy \(\times\) with US$
• C) An US$33.33 arbitrage profit can be realized
• D) All of the above
• E) None of above

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Definitions:

Lysozymes

Enzymes that damage bacterial cell walls by catalyzing the hydrolysis of 1,4-beta-linkages between N-acetylmuramic acid and N-acetyl-D-glucosamine, found in saliva, mucus, and tears.

Bile Acids

Steroid acids found predominantly in the bile of mammals, crucial for the digestion and absorption of fats and fat-soluble vitamins in the small intestine.

Metabolizing

The complex set of life-sustaining chemical transformations within the cells of living organisms, including processes such as digestion, energy production, and detoxification.

Lowest Ph

Describes the most acidic condition in a given set, generally a pH value close to 0, indicating high hydrogen ion concentration.