Multiple Choice
Assume that U.S. interest rates are 6%, while British interest rates are 7%. If the international Fisher effect holds and is used to determine the future spot rate, the forecast would reflect an expectation of:
A) appreciation of pound's value over the next year.
B) depreciation of pound's value over the next year.
C) no change in pound's value over the next year.
D) not enough information to answer this question.
Correct Answer:
Verified
Correct Answer:
Verified
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