Solved

A Foreign Investor Placing Money in Dollar Denominated Assets Desires

Question 39

Essay

A foreign investor placing money in dollar denominated assets desires a 4% real rate of return. Global inflation is running about 3% and the dollar is expected to decline against her home currency by 1.5% over the investment period. What is her minimum required rate of return? Explain

Correct Answer:

verifed

Verified

Approximately 4% + 3% + 1.5% = 8.5%
She ...

View Answer

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions