If the dollar interest rate is 10 percent, the euro interest rate is 12 percent, then
A) an investor should invest only in dollars if the expected dollar appreciation against the euro is 4 percent.
B) an investor should invest only in euros an investor should invest only in dollars if the expected dollar appreciation against the euro is 4 percent.
C) an investor should be indifferent between dollars and euros an investor should invest only in dollars if the expected dollar appreciation against the euro is 4 percent.
D) an investor should invest only in dollars.
E) an investor should invest only in euros.
A
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A firm is considering the purchase of a piece of equipment that will add $200 per year to the firm's revenue forever. If the interest rate is 10 percent, the firm will purchase the equipment so long as it costs less than
a. $1,000 b. $2,000 c. $4,000 d. $6,000 e. $8,000
Which of the following is the best definition of the natural rate of unemployment?
a. the percentage of the population age 16 and older who are unemployed b. the percentage of the working-age population in the labor force c. the median annual unemployment rate d. the rate of frictional unemployment