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Author Question: In the graph above, which points reflect an interest parity arbitrage opportunity? A) point A B) ... (Read 26 times)

craiczarry

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on: Jun 30, 2018
In the graph above, which points reflect an interest parity arbitrage opportunity?
 
  A) point A
  B) point B
  C) point C
  D) points B and C

Question 2

Suppose an MNC subsidiary buys 100 input units from its parent at a price of 2 each. It has 300 in additional production costs, and sells its 100 units of output for 6 to the MNC. It pays a 25 local profit tax.
 
  The MNC sells the output at home for 8, and its cost of producing inputs is 1 . It pays a profit tax of 20 at home on repatriated profits. What is the subsidiary net profit? Assume no selling costs at home. What is the MNC's total profit from the operation?


ashely1112

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Reply #1 on: Jun 30, 2018
Answer to Question 1

D

Answer to Question 2

75; 360


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