At Current Exchange Rates It Takes 0

question 81

Multiple Choice

At current exchange rates it takes 0.1475 Canadian dollars to buy Chinese yuan (CNY) ,and 0.6052 Canadian dollars to buy one Brazilian real (BRL) .What must the yuan/real exchange rate be in order to eliminate arbitrage opportunities?

• A)0.0893 CNY/BRL
• B)11.2023 CNY/BRL
• C)0.2437 CNY/BRL
• D)4.1031 CNY/BRL
• E)6.7797 CNY/BRL

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Definitions:

U.S. Dollars

The official currency of the United States, widely used for domestic and international transactions alike, serving as a major global reserve currency.

Comparative Advantage

The principle that a country, individual, company, or region can produce goods or services at a lower opportunity cost than others, leading to more efficient trade.

Protectionism

Economic policy of restricting imports from other countries through methods such as tariffs and import quotas, aimed at protecting domestic industries.

Consolidated Statements

Financial statements that aggregate the financial position and operations of a parent company and its subsidiaries, showing the financial results of the entire group as a single entity.