Suppose the iPhone 12 costs HK$6,000 per unit in Hong Kong and NZ$1,500 per unit in Auckland. The current exchange rate is 5.5 Hong Kong dollars per NZ dollar. For the sake of convenience, we assume that taxes and transportation costs between Hong Kong and New Zealand amount to NZ$100 per unit of the iPhone 12. Which of the following statements is correct?

Group of answer choices

There is an arbitrage (profit-making) opportunity here where you buy an iPhone 12 in Auckland for NZ$1,500, sell it in Hong Kong for HK$ 6,000, and make a profit of HK$2800.

There is an arbitrage (profit-making) opportunity here where you buy an iPhone 12 in Hong Kong for HK$6,000, sell it in Auckland for NZ$1,500, and make a profit of NZ$309.09.

There is an arbitrage (profit-making) opportunity here where you buy an iPhone 12 in Hong Kong for HK$6,000, sell it in Auckland for NZ$1,500, and make a profit of NZ$409.09.

There is no arbitrage (profit-making) opportunities here since the real exchange rate of the iPhone 12 is the same in both Hong Kong and New Zealand.

Answer rating: 100% (QA)

Lets provided HK 6000pu Hong Kong Auckland NZ 1500 pu 55 HKNZ ... View the full answer