Multiple Choice
Assume that the U.S. interest rate is 5%, the European interest rate is 2%, and the future expected exchange rate in one year is $1.224. If the spot rate is $1.16, then the expected dollar return on euro deposits is:
A) 7.52%
B) 5%
C) 3.2%
D) 2%
Correct Answer:
Verified
Correct Answer:
Verified
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