Assume That a U

question 23

Multiple Choice

Assume that a U.S.investor invests in a British CD offering a sixmonth interest rate of 5%.  Over this sixmonth period,the pound depreciates by 9%.  The effective yield on the British CD for the U.S.investor is:

• A) 14.45%.
• B) 4.45%.
• C) 14.00%.
• D)4.00%.

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Definitions:

Limited Resources

The scarcity of resources in comparison to the potentially limitless wants and needs, forcing the need for allocation decisions.

Capacity Utilization Rate

The percentage of a firm's total possible production capacity that is actually being used over a given period.

Global Economy

The interconnected networks of economic activities, trade, and investment transcending national borders, encompassing the production, distribution, and consumption of goods and services worldwide.

Importance

The state or fact of being of great significance or value.