Which of the Following Is Likely to Result in Long-Run

question 136

Multiple Choice

Which of the following is likely to result in long-run depreciation of the U.S.dollar relative to the euro?

• A) relatively low interest rates in the United States
• B) relatively high labor productivity in the United States
• C) tariffs levied by the United States on steel imports from Europe
• D) stronger American preferences for goods produced in Europe

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Definitions:

Treasury Bills

Short-term U.S. government debt obligations with maturities of one year or less, considered a safe and liquid investment.

Optimal Weights

The proportion of each asset in a portfolio that maximizes its expected return for a given level of risk.

Expected Rate

Typically refers to the rate of return anticipated on an investment or project, based on projections or historical data.

Nominal Sharpe Ratio

A measure of risk-adjusted performance that indicates the average return minus the risk-free return divided by the standard deviation of return on an investment.