Imperfect Asset Substitutability Assumes

Multiple Choice

Imperfect asset substitutability assumes:

A) the returns on foreign and domestic currency bonds are the same.
B) the returns on foreign and domestic currency are unrelated.
C) the returns on foreign and domestic currency are not influenced by risk.
D) sterilized intervention proves to be unproductive.
E) the returns on foreign and domestic currency are different, but both are influenced by risk.