Question 1 A. Define and explain the theory of comparative advantage (use an example if necessary). B. Discuss limitations of comparative advantage (Include in your answer at least five key limitations to this theory).
Question 1
A. Define and explain the theory of
necessary).
B. Discuss limitations of comparative advantage (Include in your answer at least
five key limitations to this theory).
C. Spencer Grant is a New York-based investor. He has been closely following his
investment in 100 shares of Vaniteux, a French firm that went public in February
of 2010. When he purchased his 100 shares at €17.25 per share, the euro was
trading at $1.360/€. Currently, the share is trading at €28.33 per share, and the
dollar has fallen to $1.4170/€.
a If Spencer sells his shares today, what percentage change in the share price
would he receive?
What is the percentage change in the value of euro versus the dollar over
this same period?
What would be the total return Spencer would earn on his shares if he sold
them at these rates?
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