Assume That the U

question 78

Multiple Choice

Assume that the U.S. investors are benefiting from covered interest arbitrage due to high interest rates on euros. Which of the following forces should result from the act of this covered interest arbitrage?

• A) downward pressure on the euro's spot rate.
• B) downward pressure on the euro's forward rate.
• C) downward pressure on the U.S. interest rate.
• D) upward pressure on the euro's interest rate.

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Definitions:

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Pertaining to the day-to-day functions and activities necessary for a business or organization to run effectively.

Internal Users

Individuals within an organization who use its financial information to make decisions, including executives, managers, and other employees.

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Analytical reports designed for business managers to assist in making strategic decisions.

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The cognitive process resulting in the selection of a course of action among several possible alternatives.