The Yield on a 1-Year Bill in the U

question 19

Multiple Choice

The yield on a 1-year bill in the U.K. is 7%, and the present exchange rate is 1 pound = U.S. $1.65. If you expect the exchange rate to be 1 pound = U.S. $1.45 a year from now, the return a U.S. investor can expect to earn by investing in U.K. bills is

• A) −6.7%.
• B) 3.2%.
• C) 8%.
• D) −5.97%.
• E) None of the options

---

Definitions:

Specific Details

Precise and concrete facts or descriptions that sharpen the focus and understanding of a topic.

Sentence Variety

The practice of varying the length and structure of sentences to enhance readability and interest.

Sentence Length

Refers to the number of words in a sentence, which can affect the clarity, readability, and stylistic effect of text.

Switch Person

In writing, the act of changing the narrative perspective or point of view, such as from first person to third person.