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BARSIC [14]
3 years ago
8

True or False: The Law of One Price states that in competitive markets free of transportation costs and barriers to trade (such

as tariffs), identical products sold in different countries must sell for the same price when their price is expressed in the same currency.
Business
2 answers:
Assoli18 [71]3 years ago
6 0

Answer:

The Law of One Price stated in the question above is <u>TRUE</u>

Explanation:

The law of one price is an economic concept that states that the price of an identical asset or commodity will have the same price globally, regardless of location, when certain factors are considered.

The law of one price takes into account a friction less market, where there are no transaction costs, transportation costs, or legal restrictions, the currency exchange rates are the same, and that there is no price manipulation by buyers or sellers.

This law exists because differences between asset prices in different locations would eventually be eliminated due to the arbitrage opportunity.

These are the maxims upon which the law of one price is founded

  • The law of one price states that in the absence of friction between global markets, the price for any asset will be the same.  
  • The law of one price is achieved by eliminating price differences through arbitrage opportunities between markets.
  • Market equilibrium forces would eventually converge the price of the asset.

sukhopar [10]3 years ago
4 0

Answer:

It is False

The law of one price (LOOP) states that in the absence of trade frictions (such as transport costs and tariffs), and under conditions of free competition and price flexibility (where no individual sellers or buyers have power to manipulate prices and prices can freely adjust), identical goods sold in different.

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Answer:

D) Lessons learnt report is the correct option.

Explanation:

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You purchase a twenty year zero coupon bond with a yield of 5%. One year later you sell the bond at a yield of 4%. What is your
astraxan [27]

Answer:

25.94%

Explanation:

Assume, Face value of bond =$1000

Purchase price of twenty year zero coupon bond = 1000/((1+i)^N) . Where, yield = 5% =0.05 , N= number of years to maturity =20

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Purchase Price = 1000/2.65329770514

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Selling Price after one year:  1000/(1+I)^19. Where i=yield=4%=0.04, N=19

Selling Price=1000/(1.04^19)

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Rate of Return = 25.94%

7 0
2 years ago
A jet ski that previously sold for $5,599.99 has been reduced to $3,863.99. What is the markdown percent? (Round your answer to
tangare [24]

Answer:

31%

Explanation:

The current price is $3,863.99

The precious price is $5,599.99

The actual difference in price is  $5,599.99 - $3,863.99

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Recently, much of the Western United States experienced drought conditions and water usage was restricted in Denver. Yet, even t
Savatey [412]

Answer: Price inelastic.

Explanation:

In Denver as described in the question the demand for water is price inelastic as it doesn't change regardless of changes in price of water. An item is said to be price inelastic if the demand remains the same regardless of price rise or fall of that item.

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