If the Interest Rate Is 13 Percent on Euro Deposits

Multiple Choice

If the interest rate is 13 percent on euro deposits and 15 percent on dollar deposits,and if the euro is expected to appreciate at a 4 percent rate relative to the dollar,then

A) euro deposits have a lower expected return than dollar deposits.
B) the expected return on euro deposits in terms of dollars is 9 percent.
C) the expected return on dollar deposits in terms of euros is 19 percent.
D) both A and B of the above will occur.
E) none of the above will occur.