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.

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Definitions:

Thickening

The process of making a liquid denser or more viscous by adding a substance, often used in cooking or in industrial processes.

Vaginal Walls

The muscular and membranous inner layers of the vagina, which can stretch and contract.

Overexertion

The condition of straining or putting too much effort beyond one's physical or mental capacity, which may lead to injury or exhaustion.

Reflexes

Involuntary and nearly instantaneous responses to stimuli.