Suppose That the One-Year Forward Price of Euros in Terms

question 75

Multiple Choice

Suppose that the one-year forward price of euros in terms of dollars is equal to $1.113 per euro.Further,assume that the spot exchange rate is $1.05 per euro,and the interest rate on dollar deposits is 10 percent and on euro it is 4 percent.Under these assumptions

• A)interest parity does not hold.
• B)interest parity does hold.
• C)it is hard to tell whether interest parity does or does not hold.
• D)Not enough information is given to answer the question.
• E)interest parity fluctuates.

Understand the concept of reader benefits and their role in appealing to audiences.

Recognize the differences between intrinsic and extrinsic benefits.

Comprehend Maslow's hierarchy of needs and its application to understanding human motivations.

Identify techniques for developing vivid, specific reader benefits.