The Current Spot Rate for the Norwegian Krone Is $1

question 252

Multiple Choice

The current spot rate for the Norwegian krone is $1 = NKr6.0888. The expected inflation rate in Norway is three percent and in the U.S. four percent. A risk-free asset in the U.S. is yielding six
Percent. What risk-free rate of return should you expect on a Norwegian security?

• A) 2 percent
• B) 3 percent
• C) 4 percent
• D) 5 percent
• E) 6 percent

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Shaded Area

This refers to the region that is visually differentiated by a darker shade on a graph or diagram, often used to highlight specific sections.

Z-scores

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A normal distribution with a mean of zero and a standard deviation of one, used in z-tests of statistical significance.