When Canadians or Foreigners Expect the Return on Dollar Assets

question 118

Multiple Choice

When Canadians or foreigners expect the return on dollar assets to be high relative to the return on foreign assets, there is a ________ demand for dollar assets and a correspondingly ________ demand for foreign assets.

• A) higher; higher
• B) higher; lower
• C) lower; higher
• D) lower; lower

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Definitions:

Stockholders' Equity

Represents the ownership interest of shareholders in the corporation, calculated as total assets minus total liabilities.

Noncumulative Preferred Stock

A type of preferred stock where dividend payments are not required to be paid in periods when they are not declared.

Dividends Received

The payments a shareholder receives from a company out of its profits or reserves as a return on the shareholder's investment.

Par Value

The face value of a bond or stock as stated by the issuing company, not necessarily its market value.