Assume that the U.S. interest rate is 12 percent, while the British interest rate is 15 percent. If interest rate parity exists, then: O a.U.S. investors will earn 12 percent whether they use covered interest arbitrage or invest in the United States. O b. U.S. investors will earn a higher rate of return when using covered interest arbitrage than what they would earn in the United States. O c. British investors who invest in the United Kingdom will achieve the same return as U.S. investors who invest in the United States. O d. U.S. investors will earn 15 percent whether they use covered interest arbitrage or invest in the United States.

A Guatemalan citizen working in Canada sends remittances to her family in Guatemala. This transaction appears as a... O negative entry in the Guatemalan Capital and Financial Account O positive entry in the Guatemalan Capital and Financial Account O negative entry in the Guatemalan Current Account O negative entry in the Canadian Capital and Financial Account O negative entry in the Canadian Current Account

6. In the exchange rate model in Example 7.2, supposethe company continues to manufacture its product inthe United States, but now it sells its product in theUnited States, the United Kingdom, and possibly othercountries. The company can independently set its pricein each country where it sells. For example, the pricecould be $150 in the United States and £110 in theUnited Kingdom. You can assume that the demandfunction in each country is of the constant elasticityform, each with its own parameters. The question iswhether the company can use Solver independently ineach country to find the optimal price in this country.(You should be able to answer this question withoutactually running any Solver model(s), but you mightwant to experiment, just to verify your reasoning.)

Answer please fastly...

Assume the following exchange rates Value of Canadian Dollar in U.S dollars                          $.92 value of New Zealand dollar in U.S dollars                     $.32 Value of Canadian dollar in New Zealand dollars        NZ $3.00 Given this information, starting with U.S dollar, you and others can perform triangular arbitrage by________. a. Using U.S dollar to buy New Zealand dollar at $.32. b. Using U.S dollar to buy Canadian dollar at $.92 c. Using New Zealand dollar to buy Canadian dollar at NZ$3.00 d. Using U.S dollar to buy Canadian dollar at NZ$3.00

If U.S. residents purchase $600 billion worth of foreign assets and foreigner residents purchase $300 billion worth of U.S. assets, OA. U.S. net capital outflow is $300 billion; capital is flowing into the U.S. OB. U.S. net capital outflow is -$300 billion; capital is flowing into the U.S. OC. U.S. net capital outflow is -$300 billion; capital is flowing out of the U.S. OD. U.S. net capital outflow is $300 billion; capital is flowing out of the U.S. Reset Selection

Urgent!!

Suppose the average interest rate on euro bonds is 4% and the average interest rate on U.S. dollar bonds is 6%. Which should the investor choose? The euro bond, because European economies are usually more stable Neither, because bonds have high default rates in both countries. Both, because an investor will choose some euro bonds and some U.S. bonds to diversify O It is not possible to answer without information on exchange rates.

O either positive or negative Question 9 If Tony Stark provides consulting services to a firm in Sweden, this is then counted as a O credit in the current account debit in the current account credit in the capital account O debit in the capital account Question 10 If Dominic Toretto purchases a Toyota Supra that comes from Japan, this is then counted as a O credit in the current account O debit in the current account O credit in the capital account O debit in the capital account MacBook Air

13. Study Questions #13. Ch 11. Suppose the interest rate (on an annual basis) on three-month Treasury bills is 10% in London and 6% in New York, and the spot rate of the pound is $2.03. How can a U.S. investor profit from uncovered interest arbitrage? O Purchase pounds at $2.03 in New York to buy U.K. Treasury bills in London, thus earning 4% per year. O Purchase pounds at $2.03 in New York to buy U.K. Treasury bills in London, thus earning 3% per year. O Purchase pounds at $2.03 in New York and sell them in the U.K., thus earning 4%. O Purchase pounds at $2.03 in New York to buy U.K. Treasury bills in London, thus earning 3.05% per year.