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:

Legitimate Power

The authority or power that is recognized and accepted within an organizational or societal structure, often based on a position of leadership or role.

Position Power

The authority and influence a person holds in an organization by virtue of the position they occupy, rather than personal attributes or expertise.

Reward Power

Reward power is the capacity to offer something of value as a way of influencing other people.

Positive Outcomes

Favorable results achieved after the implementation of a plan, strategy, or action.