An investor is examining the exchange rates in New York and London. For simplicity, the rates are all quoted versus the U.S. dollar. In New York: The euro rate is $1.30. The pound rate is $0.89. The Swiss franc rate is 1.18 SF.
In London: The euro rate is $1.27. The pound rate is $0.93. The Swiss franc rate is 1.20 SF.
A firm wants to buy equipment from a Swiss firm. Should the firm use its New York or London account?
A. London
B. New York
C. Either New York or London
Long-term inflation will cause a country's currency to
A. either appreciate or depreciate
B. depreciate
C. appreciate