Assume that a British investor buys a one-year U.S. Treasury bill that pays 6 percent annual interest. Given a yield of 4 percent on a comparable British Treasury bill, the U.S. dollar must depreciate 2 percent against the British pound during the year for interest rate parity to hold
a. True
b. False
Indicate whether the statement is true or false
True
You might also like to view...
Health Bars is considering a two-year advertising campaign. The campaign will cost $60,000 at the end of each of the two years. The managers of Health Bars have estimated that the campaign will generate $42,000 a year in additional profit for the next three years. If the discount rate is 4 percent, what is the net present value of the advertising campaign?
A) $5,125 B) $3,388 C) $2,896 D) $3,952
An analysis of IBM's pricing decisions would be classified as a macroeconomic study
a. True b. False Indicate whether the statement is true or false
Which of the following is an example of the Tragedy of the Commons?
a. The number of professional football teams increases to the point where the quality of the games decreases, as does television viewership. b. The number of satellites increases to the point where they begin running into each other. c. Disney World becomes so crowded that it institutes a lottery for admissions. d. A tiger breeding program becomes so successful that local zoos have to build additional exhibits so that visitors can view the cats.
If the price of a good is below the equilibrium price,
What will be an ideal response?