If purchasing-power parity holds, then the value of the a. real exchange rate is equal to one. a dollar buys the quantity of foreign currency equal to the u. s. price level divided by the foreign country’s price level. b. nominal exchange rate is equal to one. a dollar buys the quantity of foreign currency equal to the u. s. price level divided by the foreign country’s price level. c. real exchange rate is equal to one. a dollar buys as many goods in the u. s. as it does overseas. d. nominal exchange rate is equal to one. a dollar buys as many goods in the u. s. as it does overseas.

Profits from using currency options and futures. on july 2, the two-month futures rate of the mexican peso contained a 2 percent discount (unannualized). there was a call option on pesos with an exercise price that was equal to the spot rate. there was also a put option on pesos with an exercise price equal to the spot rate. the premium on each of these options was 3 percent of the spot rate at that time. on september 2, the option expired. go to the oanda. com website (or any site that has foreign exchange rate quotations) and determine the direct quote of the mexican peso. you exercised the option on this date if it was feasible to do so. a. what was your net profit per unit if you had purchased the call option? b. what was your net profit per unit if you had purchased the put option? c. what was your net profit per unit if you had purchased a futures contract on july 2 that had a settlement date of september 2? d. what was your net profit per unit if you sold a futures contract on july 2 that had a settlement date of september 2

You hold a diversified $100,000 portfolio consisting of 20 stocks with $5,000 invested in each. the portfolio's beta is 1.12. you plan to sell a stock with b = 0.90 and use the proceeds to buy a new stock with b = 1.50. what will the portfolio's new beta be? do not round your intermediate calculations.

Arecession is defined as a period in which