Multiple Choice
Assume that the U.S.interest rate is 11% while the interest rate on euro is 7%. If euros are borrowed by a U.S.firm,they would have to _________ against the dollar by __________ in order to have the same effective financing rate from borrowing dollars.
A) depreciate;about 3.74%
B) appreciate;about 3.74%
C) appreciate;about 4.53%
D) depreciate;about 4.53%
Correct Answer:
Verified
Correct Answer:
Verified
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