If the Dollar Interest Rate Is 10 Percent and the Euro

question 52

Multiple Choice

If the dollar interest rate is 10 percent and the euro interest rate is 6 percent, then an investor should

• A) invest only in dollars.
• B) invest only in euros.
• C) be indifferent between dollars and euros.
• D) invest only in dollars if the exchange rate is expected to remain constant.
• E) invest only in euros if the exchange rate is expected to remain constant.

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Definitions:

Zygote

The cell that is formed from the union of the egg and sperm.

Mesoderm

The middle layer of an embryo in early development, which gives rise to muscles, bones, and other connective tissues.

Ectoderm

The outermost layer of cells or tissue of an embryo in early development, giving rise to the outer layer of skin and nervous system.

Endoderm

The innermost layer of cells or tissue of an embryo in early development, which gives rise to the linings of the digestive and respiratory systems.