Suppose the U

Multiple Choice

Suppose the U.S.one-year interest rate is 3% per year,while a foreign country has a one-year interest rate of 5% per year.Ignoring risk and transaction costs,a U.S.investor should invest in foreign bonds as long as the expected yearly rate of depreciation of the foreign currency is

A) less than 5%.
B) greater than 5%.
C) greater than 2%.
D) less than 2%.
E) less than 1%.