If the spot rate for euros depreciates, and all other variables and expected values remain constant, U.S. investors contemplating European investments would:
a. get larger returns in terms of dollars.
b. get smaller returns in terms of dollars.
c. get very similar returns because of arbitrage.
d. lose the principal of the investment.
Answer: b. get smaller returns in terms of dollars.
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The economy is undergoing a recession that has reduced consumers' incomes. In the computer chip market, this will lead to
A) an increase in price and a decrease in quantity. B) an increase in price and an increase in quantity. C) a decrease in price and a decrease in quantity. D) a decrease in price and an increase in quantity.
Money payments made by governments to individuals for which no services or goods are concurrently rendered are known as
A) transfer payments. B) government-sponsored payments. C) government-inhibited payments. D) black market payments.