Multiple Choice
Which of the following statements is false?
A) If the US dollar depreciates, there will be a capital loss on assets held in US dollars.
B) If US dollar depreciates, interest parity condition requires that US interest rate is higher the Canadian interest rate.
C) Appreciation of US dollars will lead to capital loss on US dollar-based assets.
D) Depreciation of Canadian dollar explains why US interest rate is lower than Canadian interest rate.
Correct Answer:
Verified
Correct Answer:
Verified
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