If the Dollar Interest Rate Is 10 Percent and the Euro

Multiple Choice

If the dollar interest rate is 10 percent and the euro interest rate is 6 percent, then

A) an investor should invest only in dollars if the expected dollar depreciation against the euro is 8 percent.
B) an investor should invest only in euros if the expected dollar depreciation against the euro is 8 percent.
C) an investor should be indifferent between dollars and euros if the expected dollar depreciation against the euro is 8 percent.
D) an investor should invest only in dollars.
E) an investor should invest only in euros.