What is the fixed exchange rate implied by fixed gold prices

Assignment Help Business Law and Ethics

Reference no: EM131213621

Under the gold standard the fixed price of gold was $20.67 per ounce in the United States. The fixed price of gold was £4.2474 per ounce in Britain.

a. What is the "fixed" exchange rate (dollars per pound) implied by these fixed gold prices?

b. How would you arbitrage if the exchange rate quoted in the foreign exchange market were $4.00 per pound? (Under the gold standard, you could buy or sell gold with each central bank at the fixed price of gold in each country.)

c. What pressure is placed on the exchange rate by this arbitrage?

Reference no: EM131213621

Questions Cloud

Demand and supply graph of the foreign exchange market : Draw a demand and supply graph of the foreign exchange market showing the central rate and the positions of the nonofficial supply and demand curves.

Current implementation and concerns : Parent domain (kris.local) and child domain (corp.kris.local) for the organization's AD infrastructure are running on Server 2008. The following are concerns related to AD: (1) Kris Corporation is concerned about running multiple domain, and (2) a..

How are your past project data and experience kept : Do you have an experience factory within your organization or something similar, such as an experience warehouse or database? How are your past project data and experience kept?

Video expect the internet to have on government : What changes did the people in the video expect the Internet to have on government? Which predictions and/or what perceptions proved true and which ones did not? Explain why the Internet fell short of expectations in terms of its impact on politics..

What is the fixed exchange rate implied by fixed gold prices : What is the "fixed" exchange rate (dollars per pound) implied by these fixed gold prices?- What pressure is placed on the exchange rate by this arbitrage?

What are the required rates of return on the four stocks : What are the required rates of return on the four stocks? Why do their required rates of return differ? Suppose that a person is planning to invest in only one stock rather than hold a well-diversified stock ..

Will you continue with individual services : Assume that one participant must be referred to ongoing services. Describe how you, as the counselor, will handle this referral for continued services. Will you continue with individual services, refer to another therapist, or refer to another gro..

Comprehensive report to cio of project organization : Using the feedback that you have received throughout the quarter, create a comprehensive report to the CIO of the project organization that covers the following:

Describe protection and safety measures : Describe protection and safety measures for support technicians. Identify safety measures for working with electronics. Explain the dangers that support technicians should consider.

User Account

All Pages