Suppose the 1-Year Risk-Free Rate of Return in the U

question 48

Multiple Choice

Suppose the 1-year risk-free rate of return in the U.S. is 4% and the 1-year risk-free rate of return in Britain is 6%. The current exchange rate is 1 pound = U.S. $1.67. A 1-year future exchange rate of __________ for the pound would make a U.S. investor indifferent between investing in the U.S. security and investing in the British security.

• A) 1.6385
• B) 2.0411
• C) 1.7500
• D) 2.3369

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Roles

The expected or assigned behaviors, responsibilities, and functions of individuals within certain contexts, such as in families, workplaces, or social settings.

Criteria Syntax

The specific arrangement and use of symbols and text to define criteria in queries and programming.

Date/Time

Functions or data types in programming and software that deal with the representation and manipulation of dates and times.

Date/Time

In computing and data management, refers to functions or data types used to represent both dates and times in various formats.