Your firm wants to convert $1.4 million Australian into US dollars in purchase in 12 months. The spot rate is $0.9704 equals $1 Australian. The inflation rates in Australia and the United States are expected to be 6 percent and 2 percent, respectively. Using the concept of purchasing power parity (PPP) as its relates to future exchange rates, determine the difference in costs between completing the transaction now and doing it in 12 months. A. $36,821 B. $54,320 C. $42.568 D. $60,242

Which statement or statements are implied by equilibrium conditions of the loanable funds market? a firm borrowing in the loanable funds market invests those funds with a higher expected return than any firm that is not borrowing. investment projects which use borrowed funds are guaranteed to be profitable even after paying interest expenses. the quantity of savings is maximized, thus the quantity of investment is maximized. a loan is made at the minimum interest rate of all current borrowing.