Assume That Interest Rates in the United States and Britain

question 177

Multiple Choice

Assume that interest rates in the United States and Britain are the same.If a U.S.resident anticipates that the exchange value of the dollar is going to appreciate against the pound,she should:

• A) Borrow needed funds from British banks rather than U.S.banks
• B) Borrow needed funds from U.S.banks rather than British banks
• C) Convert U.S.dollars into British pounds
• D) Any of the above

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Definitions:

Preparation Costs

Expenses incurred in getting assets or products ready for use or sale.

Sales Tax

A government-imposed tax on sales of goods and services, collected by retailers at the point of sale and then passed on to the government.

Transportation Costs

Expenses incurred in the process of moving goods from one location to another, including freight, shipping, and handling fees.

Computer Equipment

The physical hardware and devices used for computing processes, such as servers, desktops, laptops, and related peripherals.