For a Canadian-Based Investor, a Weaker Dollar Means That Overall

question 56

Multiple Choice

For a Canadian-based investor, a weaker dollar means that overall dollar based returns on overseas security investment will be higher because

• A) A weaker dollar means that exports will rise.
• B) A weaker dollar means that more foreign investors will by U.S. securities.
• C) A weaker dollar means that the foreign currency will convert to more dollars.
• D) A weaker dollar means that more investors will purchase the foreign security.
• E) None of the above.

---

Definitions:

Board of Governors

A governing body that oversees the operation and management of an organization, institution, or entity, like the Federal Reserve in the United States.

Deposit Insurance

A guarantee by a government or agency to cover deposits in the event of a bank failure, up to a certain amount.

Reserve Requirement

The reserve requirement is a central bank regulation that sets the minimum fraction of customer deposits and notes that each commercial bank must hold as reserves rather than lending out.

Discount Rate

The interest rate charged to commercial banks and other financial institutions for loans received from the central bank's discount window.