If a Dollar Invested in the United States Yields the Same

question 28

Multiple Choice

If a dollar invested in the United States yields the same return as a dollar's worth of yen invested in Japan,then it implies that:

• A)purchasing power parity exists.
• B)the exchange market is in equilibrium.
• C)the dollar/yen exchange rate is fixed.
• D)interest rate parity exists.
• E)both the currencies are pegged to a fixed amount of gold.

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Definitions:

Accounting Science

The discipline that studies the concepts, rules, and processes followed in accounting to collect, analyze, verify, and report financial information.

Financial Fraud

Intentional acts of deception involving financial transactions for the purpose of personal gain, such as embezzlement, insider trading, and fraudulent financial reporting.

Financial Statements

Compiled documents that present an entity's financial activity and condition, including the balance sheet, income statement, and cash flow statement.

Economic Opportunities

Chances or prospects available in the marketplace that can lead to financial growth, business expansion, and employment generation.