Suppose That a U

question 119

Multiple Choice

Suppose that a U.S. dollar can earn interest of 5 percent a year in Chicago and a Canadian dollar can earn interest of 7 percent a year in Winnipeg. Will money flow from Chicago to Winnipeg?

• A)Yes, because the returns on money are higher in Winnipeg.
• B)No, because the outflow of U.S. funds would create a decrease in the U.S. dollar value, penalizing investors when they attempted to recover their funds.
• C)No, if investors expect that the Canadian dollar will appreciate by at least 2 percent per year.
• D)No, if investors expect the U.S. dollar to appreciate by at least 2 percent per year.
• E)No, as long as the U.S. dollar maintains higher purchasing power than the Canadian dollar.

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Definitions:

Kurt Lewin

A psychologist known for pioneering social, organizational, and applied psychology, including the change management theory involving unfreeze-change-refreeze stages.

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A deliberate and structured process designed to transform an organization's operations, strategy, or culture to improve efficiency and effectiveness.

HR Professionals

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Competencies

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