As the Relative Expected Return on Dollar Assets Increases,foreigners Will

question 122

Multiple Choice

As the relative expected return on dollar assets increases,foreigners will want to hold more ________ assets and less ________ assets,everything else held constant.

• A)foreign;foreign
• B)foreign;dollar
• C)dollar;foreign
• D)dollar;dollar

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Definitions:

Interest Income

Income earned from investments such as savings accounts, bonds, or loans, usually calculated as a percentage of the principal amount.

Interest Receivable

The amount of interest that has been earned but not yet received in cash or recorded by the recipient company.

Effective Interest Rate

The real rate of interest earned or paid on an investment, loan, or other financial product, accounting for the effects of compounding.

Bank Discounts

An interest deduction from the face value of a note, payable by the borrower at the time a loan is issued.