Which of the Following Currency Trades Is Consistent with the Current

question 88

Multiple Choice

Which of the following currency trades is consistent with the current exchange rates of 500 Chilean pesos for US$1 and 1 British pound for US$1.50?

• A) 1,250 Chilean pesos for 2 British pounds
• B) 1,000 Chilean pesos for 2 British pounds
• C) 10 British pounds for 750 Chilean pesos
• D) 1,500 Chilean pesos for 2 British pounds

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Definitions:

Fair Value

An estimate of the price at which an asset or liability would be traded in a fair transaction between willing parties.

Financial Statements

Descriptions giving insight into a business's financial situation, covering the balance sheet, income statement, and cash flow statement.

Trading Investments

Securities bought and held primarily for selling them in the near term to generate income on short-term price differences.

Market Value

The current price at which an asset or service can be bought or sold in a market, reflecting its perceived value by participants.