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 $1.24, then the expected dollar return on euro deposits is:
A) 4%.
B) 7.1%.
C) 0.71%.
D) 0.129%.
Correct Answer:
Verified
Correct Answer:
Verified
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