Perfect Asset Substitutability Is the Assumption That

question 44

Multiple Choice

Perfect asset substitutability is the assumption that

• A) the foreign exchange market is in equilibrium only when expected returns on domestic assets are greater than returns on foreign currency bonds.
• B) the foreign exchange market is in equilibrium only when expected returns on foreign currency bonds are greater than returns on domestic assets.
• C) the foreign exchange market is in equilibrium only when expected returns on all assets are negative.
• D) the foreign exchange market is in equilibrium only when expected returns on domestic assets are equal to returns on foreign currency bonds.
• E) the foreign exchange market is in equilibrium only when domestic assets are risk-free.

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Definitions:

Unassertive

Characterized by a lack of confidence or forcefulness in expressing one's views or desires.

Accommodation

The process or act of adjusting or adapting one's environment to meet individual needs or preferences.

Cooperative

A business or organization owned and operated for the mutual benefit of its members, who share in its profits or benefits.

Unassertive

Characterized by a lack of confidence and a hesitancy to express one's own needs, desires, or opinions.