Multiple Choice
The next questions refer to the following.
Suppose prices in the US are twice as high as those in England, but the US interest rate is 4% while the interest rate in England is 8%. No inflation is expected in either country.
-On the spot market,UIP predicts that the exchange rate should be
A) £1.08 = $1.04
B) £2.16 = $0.96
C) £2.04 = $1.00
D) £1.50 = $2.00
E) £1 = $2.08
Correct Answer:
Verified
Correct Answer:
Verified
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