Suppose the Current Spot Rate for the Norwegian Kroner Is

question 63

Multiple Choice

Suppose the current spot rate for the Norwegian kroner is $1 = NKr6.7119.The expected inflation rate in Norway is 4 percent and in the U.S.3 percent.A risk-free asset in the U.S.is yielding 4.5 percent.What approximate real rate of return should you expect on a risk-free Norwegian security?

• A)1.0 percent
• B)1.5 percent
• C)2.0 percent
• D)2.5 percent
• E)3.0 percent

---

Definitions:

Preconventional Level

The first level of moral thinking in Kohlberg's theory, where moral reasoning is based primarily on external consequences to the individual.

Subsequent Punishment

is a behavior modification technique where a negative consequence follows an undesirable or unwanted behavior, intended to decrease its future occurrences.

Nervous System

The network of nerve cells and fibers that transmits nerve impulses between parts of the body, governing both voluntary actions and involuntary processes.

Infant

A very young child, especially one newly or recently born.