An investor bought a one-year government bond of Country X with a nominal interest rate of 6 percent. If the current exchange rate between the U.S. dollar and Country X's currency is 50 units per dollar and the expected exchange rate after a year is 48 units per dollar, what is the expected dollar return of investing in Country X's bond?
A. ?4 percent
B. ?3 percent
C. ?8 percent
D. ?12 percent
Answer: A
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