In an attempt to raise money in Country B, Color-Me-Green was quoted an interest rate of 14 percent by a local bank. This quoted rate is called the ________ rate.
A) cross
B) artificial
C) nominal
D) exchange
Question 2
Sam has been studying the price of wheat across markets. If a kilogram of wheat costs 1.5 in France and 1 in the United States, the law of one price would tell us ________.
A) the expected exchange rate between the euro and the dollar is 1.5/
B) wheat is over priced in France
C) wheat is under priced in France
D) an arbitrage opportunity exists in the international wheat market
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