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Which of the following statements are true? There are several, select all that are correct. Consider...

Which of the following statements are true? There are several, select all that are correct. Consider each statement on its own separate from the others listed.

Question 18 options:

  • The relationtship stipulated in the purchasing power parity (PPP) equation is also called the law of one price
  • Two reasons why financial management of a multinational company differs from that of purely domestic firms are: (1) different economic systems and (2) accounting systems
  • In a monetary system with floating exchange rates, the exchange rate between two countries is determined by government intervention
  • International investment transactions affect exchange rates

Solutions

Expert Solution

Point 1, 2 and 3 are true. They are;

1. The relationtship stipulated in the purchasing power parity (PPP) equation is also called the law of one price. because, under purchase power parity the price of good is same in all the countries.

2. Two reasons why financial management of a multinational company differs from that of purely domestic firms are: (1) different economic systems and (2) accounting systems. This point is ture.

3. International investment transactions affect exchange rates. This statement also true because, the exchange rates effects on import and expor and also investments by other countries here and our country in other countries.

jeff jeffy answered 2 years ago
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