Suppose You Have One U

question 44

Multiple Choice

Suppose you have one U.S.dollar with which you wish to purchase U.K.(one-year) bonds in period t.Which of the following expressions represents the amount of U.K.pounds you will receive in one year (i.e.,period t + 1) from purchasing U.K.bonds in period t?

• A)i
• B)1 + i*
• C)(1 + i*)Eᵉt₊₁ / Et
• D)(1 + i*)Et / Eᵉt₊₁
• E) none of the above

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