Which of the following is true of the euro?
A) It increases exchange-rate risk for business deals between member nations.
B) It increases transaction costs.
C) It makes prices between markets more transparent.
D) It is not accepted among merchants in France, Germany, and Italy.
C
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Indicate whether the statement is true or false
Suppose a U.S. importer purchases an Italian product today but will not pay for it for 90 days. The
cost of the product today is 30,000 euros. The spot exchange rate today is .6233 euros per dollar. If the U.S. importer does not hedge the position, which of the following spot exchange rates in 90 days will yield the highest returns? A) $1.4844 per euro B) 0.6833 euros per dollar C) $1.5387 per euro D) 0.6499 euros per dollar