Which of the Following Would Generate a Dollar Demand for the Euro

question 36

Multiple Choice

Which of the following would generate a dollar demand for the euro?

• A) American exports to Europe.
• B) European demand for U.S. government bonds.
• C) American demand for European real estate.
• D) All of the above are correct.

---

Definitions:

Risk Aversion

The preference to avoid uncertainty and potential financial loss.

Holding-period Return

The total return received from holding an asset or portfolio of assets over a period of time, considering both income and capital gains.

Risk Aversion

The behavior exhibited by investors who prefer lower risk investments, often at the expense of sacrificing some potential returns.

Expected Return

The anticipated average return on an investment, factoring in the probabilities of each potential outcome.