What Is the Expected Dollar Rate of Return on Euro

question 41

Multiple Choice

What is the expected dollar rate of return on euro deposits if today's exchange rate is $1.10 per euro, next year's expected exchange rate is $1.165 per euro, the dollar interest rate is 10%, and the euro interest rate is 5%?

• A) 10%
• B) 11%
• C) -1%
• D) 0%
• E) 15%

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Definitions:

Reliable

Dependable, can be relied upon.

Responsible

Having an obligation to do something, or having control over or care for someone, as part of one's job or role.

Externship

A temporary training program in a workplace, especially one offered to students as part of a course of study.

Practicum

A period of practical experience and training for a student in a specialized field.