​The Effective Yield of Investing in a Foreign Currency Depends

question 17

Multiple Choice

​The effective yield of investing in a foreign currency depends on both the ____ and the ____ of the foreign currency.

• A) ​inflation rate; exchange rate movements
• B) ​income level; interest rates
• C) ​interest rate; exchange rate movements
• D) ​interest rate; amount invested

---

Definitions:

Goods

Tangible items that are produced or manufactured and can be bought, sold, or traded.

Services

Intangible products that are produced and consumed at the same time, offering value without transferring ownership.

Free Trade

International trade left to its natural course without tariffs, quotas, or other restrictions.

NAFTA

The North American Free Trade Agreement, a treaty between Canada, Mexico, and the United States that removed tariff barriers between the nations.