The order cost per order is $10. Expected sales are 500,000 units and 20,000 units are in each order. What is the total order cost? A) $20,000 B) $500,000 C) $250 D) $200,000 E) $2,000 ANSWER C
Date: September 19th, 2020
Traders take advantage of deviations from purchasing power parity by buying cheap goods and selling expensive ones. This trading causes the price of goods to ________ and exchange rates to ________. A) fall; fall B) rise; rise C) fall; rise D) rise; fall ANSWER B
Date: September 19th, 2020
According to relative purchasing power parity, if the inflation rate in Italy was 8% and the inflation rate in Israel was 6%, A) the Italian lira should fall 6%. B) the Italian lira should fall 8%. C) the Italian lira should fall 2%. D) the Italian lira should rise 2%. E) the Italian lira should […]
Date: September 19th, 2020
What is a firm’s debt ratio if its total assets are $135,000, equity is $75,000, current liabilities are $24,000, and total liabilities are $105,000? A) 140% B) 110% C) 50% D) 60% E) 78% ANSWER E
Date: September 19th, 2020
If the price of wheat is $25/bushel in the United States and $20/bushel in Canada, all of the following would tend to equalize prices EXCEPT: A) when the U.S. imposes a tariff on Canadian wheat. B) the Canadian dollar will appreciate. C) when the domestic price of U.S. wheat falls. D) the U.S. dollar will […]
Date: September 19th, 2020
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
