What is the expected dollar rate of return on euro deposits if today's exchange rate is $1.10 per euro, next year's expected exchange rate is $1.166 per euro, the dollar interest rate is 10%, and the euro interest rate is 5%?
A) 10%
B) 11%
C) -1%
D) 0%
E) 15%
B
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In Figure 4-18, there would be a shortage of T-shirts if the price were
A. $10 and the market price will rise. B. $8 and the market will tend toward equilibrium. C. below $8 and the shortage persists. D. between $8 and $6 and the shortage will get larger.
Passive policy advocates rely on the economy's natural ability to correct itself in case of unemployment because of: a. the lack of any real concern for those who have no jobs
b. the conviction that unemployment is relatively harmless. c. the belief that active economic policy is likely to be either ineffective or harmful. d. the desire to await further economic data before intervening. e. the belief in the law of diminishing returns.
If national income is equal to zero, then consumption must also be equal to zero
Indicate whether the statement is true or false
Canada is a major world producer and exporter of wheat and a great percent of its GDP is derived from this one good. That's both good news and bad news for Canada. The good news is
a. that other countries have less of a target to retaliate on but the bad news is that they are most likely to retaliate b. that Canada can concentrate on principally one good but the bad news is that its comparative advantage changes when its absolute advantage changes c. that Canada can concentrate on principally one good but the bad news is that its absolute advantage changes when its comparative advantage changes d. that Canada gets substantial gains from trade but the bad news is that other countries may retaliate against all Canadian exports e. that Canada gets substantial gains from trade but the bad news is that price changes in wheat can erode much of the gains