If the Law of One Price Holds and the Price

question 73

Multiple Choice

If the law of one price holds and the price of an apple in the U.S.is $1.50 while the price of an apple in Japan is ¥174.00,then what should the spot exchange rate for ¥/$ be?

• A) .0086
• B) .5747
• C) 116.00
• D) none of the above

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Definitions:

Trademark

Legal protection of a recognizable brand name, design, or logo that calls a specific product to a consumer’s mind.

Brand Logo

A visual symbol or emblem used to identify and promote a brand, making it recognizable to consumers.

Designer Bags

High-end, often luxury bags created by prominent fashion designers or brands.

Market-Creating Innovation

Innovations that result in the creation of a new market by fulfilling an unserved or underserved need or desire.