This topic contains a solution. Click here to go to the answer

Author Question: What is the expected dollar rate of return on euro deposits if today's exchange rate is 1.167 per ... (Read 144 times)

Kikoku

  • Hero Member
  • *****
  • Posts: 540
What is the expected dollar rate of return on euro deposits if today's exchange rate is 1.167 per euro, next year's expected exchange rate is 1.10 per euro, the dollar interest rate is 10, and the euro interest rate is 5?
 
  A) 10
  B) 11
  C) -1
  D) 0

Question 2

Which of the following is a FALSE statement concerning purchasing power parity?
 
  A) Purchasing power parity states that dollars will tend to exchange for pounds at a rate that maintains a constant purchasing power of a given quantity of a currency.
  B) Over the long term, a Big Mac in New York will tend to cost the same as a Big Mac in London.
  C) There should not be significant deviations in the long-run value of purchasing power parity.
  D) Over the long run, purchasing power parity exerts influence over exchange rates.
  E) An overvalued dollar buys more in Britain than it does in the United States.



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

dajones82

  • Sr. Member
  • ****
  • Posts: 359
Answer to Question 1

C

Answer to Question 2

C




Kikoku

  • Member
  • Posts: 540
Reply 2 on: Jun 30, 2018
Wow, this really help


ryansturges

  • Member
  • Posts: 338
Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

 

Did you know?

Chronic marijuana use can damage the white blood cells and reduce the immune system's ability to respond to disease by as much as 40%. Without a strong immune system, the body is vulnerable to all kinds of degenerative and infectious diseases.

Did you know?

Most childhood vaccines are 90–99% effective in preventing disease. Side effects are rarely serious.

Did you know?

The B-complex vitamins and vitamin C are not stored in the body and must be replaced each day.

Did you know?

Human stomach acid is strong enough to dissolve small pieces of metal such as razor blades or staples.

Did you know?

The training of an anesthesiologist typically requires four years of college, 4 years of medical school, 1 year of internship, and 3 years of residency.

For a complete list of videos, visit our video library