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1. If purchasing power parity applied to Big Macs, and a Big Mac cost
$2.50 in the United States while the British pound cost $1.50 and €0.90
euros could be obtained for $1.00
a) how much would the Big Mac cost in Britain and
b) Germany respectively?
2. Arbuckle Corporation is selling two million shares of common stock
in its
initial public offering (IPO). The company's investment banker,
Jones
Securities, will offer the stock to the public at $15 per share and
charge
Arbuckle Corporation an underwriting spread of 7 percent.
a) What will be the gross proceeds from the IPSO?
b) What will be Arbuckle Corporation's net proceeds from the
offering?
c) How much will Jones Securities earn for conducting the offering?
(Questions 3 to 5 have only one answer each)
3. There are ______ members of the Federal Reserve Board of
Governors, ----_______ members of the Federal Open Market
Committee, and ________ Federal Reserve Banks.
a. 12; 7; 12; b. 7; 14; 12; c. 14; 12; 12; d. 7; 12; 12