This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Which of the following is a Eurodollar claim? A) A U.S.-dollar deposit by a London firm in a ... (Read 59 times)

fnuegbu

  • Hero Member
  • *****
  • Posts: 539
on: Jun 30, 2018
Which of the following is a Eurodollar claim?
 
  A) A U.S.-dollar deposit by a London firm in a Kansas City bank
  B) A Swiss-franc deposit by a German firm in a Swiss bank
  C) A U.S.-dollar deposit by a New York firm in a London bank
  D) A Canadian-dollar deposit by a London firm in a Toronto bank

Question 2

Explain why the interest parity condition must hold if the foreign exchange market is in equilibrium.
 
  What will be an ideal response?


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

mirabriestensky

  • Sr. Member
  • ****
  • Posts: 325
Reply #1 on: Jun 30, 2018
Answer to Question 1

C

Answer to Question 2

The foreign exchange market is in equilibrium when deposits of all currencies offer the same expected rate of return. Potential holders of foreign currency deposits view them all as equally desirable assets. If expected rate of return on any currency deposit is higher or lower than the other, there will exist an excess supply or demand for that currency because one will yield a higher return than the other.


fnuegbu

  • Hero Member
  • *****
  • Posts: 539
Reply #2 on: Jun 30, 2018
Thank you :)


mirabriestensky

  • Sr. Member
  • ****
  • Posts: 325
Reply #3 on: Jun 30, 2018
Happy to help you


« previous next »
 

Did you know?

The effects of organophosphate poisoning are referred to by using the abbreviations “SLUD” or “SLUDGE,” It stands for: salivation, lacrimation, urination, defecation, GI upset, and emesis.

Did you know?

Everyone has one nostril that is larger than the other.

Did you know?

There are more sensory neurons in the tongue than in any other part of the body.

Did you know?

The average office desk has 400 times more bacteria on it than a toilet.

Did you know?

During pregnancy, a woman is more likely to experience bleeding gums and nosebleeds caused by hormonal changes that increase blood flow to the mouth and nose.

John Lewis Krimmel’s painting of the Fourth of July in Centre Square Philadelphia (1812) shows the d John Lewis Krimmel’s painting of the Fourth of July in Centre Square Philadelphia (1812) shows the d
Instructions for Completing the CMS-1500 (02/12) Claim Form Continued Instructions for Completing the CMS-1500 (02/12) Claim Form Continued
Instructions for Completing the CMS-1500 (02/12) Claim Form Continued Instructions for Completing the CMS-1500 (02/12) Claim Form Continued
One-handed kneading. Tissues are lifted with the whole hand in firm contact. One-handed kneading. Tissues are lifted with the whole hand in firm contact.
Neck stretch. Rest the receiver’s head on the palm of your right hand, taking a firm hold on the ... Neck stretch. Rest the receiver’s head on the palm of your right hand, taking a firm hold on the ...
A hypothesis test is performed to test the claim that a population proportion is greater than ... A hypothesis test is performed to test the claim that a population proportion is greater than ...
Video: Phases of the Female Reproductive Cycle - Hormonal regulation

For a complete list of videos, visit our video library