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If 1 Euro Is Priced at $1

Question 141

Multiple Choice

If 1 euro is priced at $1.25 and if 1 euro will also buy 88 Japanese yen (€1 = ¥88) , in equilibrium, with no arbitrage opportunities, how much is the cross rate between the yen and the dollar (yen-dollar rate) ?


A) ¥150/$
B) ¥70.4/$
C) ¥20/$
D) ¥5/$

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