Assume That Swiss Investors Have Francs Available to Invest in Securities

question 47

Multiple Choice

Assume that Swiss investors have francs available to invest in securities, and they initially view U.S. and British interest rates as equally attractive. Now assume that U.S. interest rates increase while British interest rates stay the same. This would likely cause:

• A) the Swiss demand for dollars to decrease and the dollar will depreciate against the pound.
• B) the Swiss demand for dollars to increase and the dollar will depreciate against the Swiss franc.
• C) the Swiss demand for dollars to increase and the dollar will appreciate against the Swiss franc.
• D) the Swiss demand for dollars to decrease and the dollar will appreciate against the pound.

---

Definitions:

Median Nerve

A major nerve of the upper limb, running down the arm and forearm, involved in sensation and motor control of the hand.

Biceps Brachii

A muscle of the upper arm responsible for the flexion of the elbow and rotation of the forearm.

Intrinsic Hand Muscles

The muscles located within the hand that are responsible for fine motor movements and control of the fingers.

Effector Organ

An organ that responds to stimulation by a nerve impulse resulting in a specific action or secretion.