The Interest Rate on a One Year Security in the United

question 54

Multiple Choice

The interest rate on a one year security in the United States is 3%,while the interest rate on a one year security in German is 8%.If the current exchange rate is 1 EURO = $1.50,then the future exchange rate in one year,according to the international Fisher effect,is

• A) $1.431.
• B) $1.425.
• C) $1.575.
• D) $1.385.

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Definitions:

Effaced

Effaced, in obstetrics, refers to the thinning and shortening of the cervix in preparation for childbirth.

Crowned

To be appointed or recognized in a ceremonial or symbolic position of authority, often used in the context of royalty or achievement.

Birth Canal

The passage comprising the cervix, vagina, and vulva through which a fetus passes during childbirth.

Uterus

A major female reproductive organ in many mammals, including humans, that hosts and nourishes the fertilized egg during pregnancy.