Use the Following Information to Answer Questions 13-14

question 26

Multiple Choice

Use the following information to answer questions 13-14.
Assume that the following exchange rates exist.

-Suppose that you are an arbitrageur that starts with $100 in New York.Which of the following paths is correct in order to make arbitrage profit?

• A) Buy pound in New York → sell pound for SFr in New York → sell SFr for dollar in New York.
• B) Buy SFr in New York → sell SFr for pound in New York → sell pound for dollar in New York.
• C) Buy SFr in New York → sell SFr for pound in Geneva → sell pound for dollar in New York.
• D) Buy pound in New York → sell pound for SFr in London → sell SFr for dollar in New York.

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Definitions:

Power Distance

A cultural dimension that describes the extent to which individuals in a society accept and expect power to be distributed unequally.

Humane Orientation

Describes a cultural dimension reflecting the degree to which a society encourages and rewards individuals for being fair, altruistic, friendly, generous, caring, and kind.

Institutional Collectivism

The degree to which organizational and societal cultural practices encourage and reward collective distribution of resources and collective action.

Uncertainty Avoidance

A cultural dimension that describes the degree to which a society tolerates ambiguity and uncertainty, influencing how its members deal with unfamiliar situations.