If the Interest Rate in the U

question 75

Multiple Choice

If the interest rate in the U.S. is i_$ = 5 percent for the next year and interest rate in the U.K. is i_£ = 8 percent for the next year, uncovered IRP suggests that

• A)the pound is expected to depreciate against the dollar by about 3 percent.
• B)the pound is expected to appreciate against the dollar by about 3 percent.
• C)the dollar is expected to appreciate against the pound by about 3 percent.
• D)both a and c

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Definitions:

Change Behavior

The process by which individuals alter their habits, actions, or reactions based on new information or a desire for improvement.

Stage Theories

The conceptualization that development or progress occurs through distinct and sequential stages.

Uniform Interventions

Standardized methods or procedures applied consistently in a research or clinical setting.

Continuum Theories

Theories that suggest changes or phenomena occur gradually over a continuum rather than being divided into distinct categories.