Suppose Sam Then Noticed That the Actual Euro/dollar Exchange Rate

Question 55
Multiple Choice

Suppose Sam then noticed that the actual euro/dollar exchange rate on currency markets is €1.2/$,and that a kilogram of wheat still costs $1 in the U.S.and €1.5 in France.Sam then knows that ________. A)the expected exchange rate between the euro and the dollar is €1.5/$ B)wheat is priced higher in France C)wheat is priced lower in France D)an arbitrage opportunity does not exist in the international wheat market