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What Is the Expected Dollar Rate of Return on Dollar

Question 40

Multiple Choice

What is the expected dollar rate of return on dollar deposits with today's exchange rate at $1.10 per euro, next year's expected exchange rate at $1.165 per euro, the dollar interest rate at 10%, and the euro interest rate at 5%?


A) 10%
B) 11%
C) -1%
D) 0%
E) 5%

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