If the Interest Rate Is 13 Percent on Euro Deposits

question 16

Multiple Choice

If the interest rate is 13 percent on euro deposits and 15 percent on dollar deposits,and if the euro is expected to appreciate at a 4 percent rate relative to the dollar,then

• A) euro deposits have a lower expected return than dollar deposits.
• B) the expected return on euro deposits in terms of dollars is 9 percent.
• C) the expected return on dollar deposits in terms of euros is 19 percent.
• D) both A and B of the above will occur.
• E) none of the above will occur.

Calculate and interpret the coefficient of determination (R^2).

Understand the concept of least squares in the context of linear regression.

Apply regression analysis to predict outcomes in real-world contexts.

Analyze the relationship between two variables using graphical methods.

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