1. With an _____________, the lessor (or owner) transfers only the right to use property to the lessee. In a _____________, the lessee assumes some of the risks of ownership and enjoys some of the benefits.
Owner, Operator
Operating lease, Capital lease
Operating asset, Operating liability
Operating asset, Capital liability
2. Suppose the cost of a market basket of goods in Hong Kong is 1,245 Hong Kong dollars, while the cost of the same market basket in Philippines is 6,500 Philippine peso. Calculate the Philippine peso/ Hong Kong dollar exchange rate if purchasing power parity holds between the two.
a. 0.19
b. 4.82
c. 0.81
d. 5.22
e. 4.32