PPP will not hold if the goods are not transportable or ________. A) Close substitutes B) Unique C) Expensive D) Cheap ANSWER A
Date: September 19th, 2020
All of the following are necessary for arbitrage to take place EXCEPT A) no transactions costs. B) no sales or transfer taxes. C) the means to execute trades quickly. D) a willingness to undertake a substantial net investment. E) different prices in different locations. ANSWER D
Date: September 19th, 2020
The theory of relative purchasing power parity A) can be used to explain differences in real interest rates among countries. B) holds extremely well in the short run. C) does not hold well in the long run. D) is used to explain the difference between U.S. and foreign treasury security yields. E) seeks to explain […]
Date: September 19th, 2020
The optimal ordering quantity for a company is 350. If the carrying cost per item is $2.50 and the cost per order is $18, what is the number of total sales expected for the year? A) 7,516 B) 5,314 C) 10,305 D) 8,507 E) 6,924 ANSWER D
Date: September 19th, 2020
Market ratios differ from other ratios because A) they are based on information not contained in the firm’s financial statements. B) they are the only ratios that may have negative values. C) they are the most important ratios to shareholders. D) they are the only ratios that relate equity measures to other variables. E) they […]
Date: September 19th, 2020
A firm has sales of $1 million, net income of $250,000, total current assets of $300,000, and accounts receivable of $200,000. The firm’s accounts receivable turnover is A) 0.33 times. B) 0.20 times. C) 1.50 times. D) 5.00 times. E) 1.25 times. ANSWER D
Date: September 19th, 2020
If the inflation rate in the United States is expected to average 4% in the future and the inflation rate in Denmark is expected to average 7%, what spot rate is expected to be in effect in three years? Assume the Danish kroner per U.S. dollar exchange rate is now $0.20. A) $0.245 B) $0.219 […]
Date: September 19th, 2020
Carrying costs per unit are $3.00. An average order contains 200 units. According to the economic order quantity model, what are total carrying costs? A) $300 B) $67 C) $600 D) $400 E) $565 ANSWER A
Date: September 19th, 2020
What is the maximum net profit to a speculator with $1 million if interest rates on 1-year Treasuries are 6% in France, 4% in the United States and the exchange rate is expected to change from today’s rate of 2Fr/$ to 2.1Fr/$ in 1 year? A) $1,060,000 B) $1,005,683 C) $1,040,000 D) $1,050,000 E) $1,009,524 […]
Date: September 19th, 2020
A theory stating that changes in inflation rates between two countries cause exchange rates to adjust is A) interest rate parity. B) exchange rate parity. C) relative purchasing power parity. D) absolute purchasing power parity. E) None of the above ANSWER C
Date: September 19th, 2020
