​According to the International Fisher Effect, If U

Multiple Choice

​According to the international Fisher effect, if U.S. investors expect a 5 percent rate of domestic inflation over one year and a 2 percent rate of inflation in European countries that use the euro, and if they require a 3 percent real return on investments over one year, the nominal interest rate on one-year U.S. Treasury securities would be:

A) ​2 percent.
B) ​3 percent.
C) -2 percent.
D) ​5 percent.
E) ​8 percent.