Consider the currency market for British pounds and U.S. dollars. A decrease in the supply of British pounds results in:
A. An appreciation of the pound and a depreciation of the dollar
B. A depreciation of the pound and a depreciation of the dollar
C. An appreciation of the pound and an appreciation of the dollar
D. A depreciation of the pound and an appreciation of the dollar
A. An appreciation of the pound and a depreciation of the dollar
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If the banking sector borrows internationally and lends locally, how does this intensify a financial crisis?
What will be an ideal response?
Assume a portfolio in which there is equal investment in two assets that are perfectly negatively correlated, with equally expected returns of 10 percent and 6 percent for asset A and 8 percent and 4 percent for asset B
The expected yield on this portfolio is A) 8 percent. B) 7 percent. C) 6 percent. D) 5 percent.