If a Foreign Currency Consistently Depreciated Against the Dollar Over

question 2

Multiple Choice

If a foreign currency consistently depreciated against the dollar over several periods and had lower interest rates at the beginning of those periods than the U.S. interest rates, then:

• A) U.S. firms could have achieved a higher effective yield on foreign deposits than on U.S. deposits during those periods.
• B) the international Fisher effect is supported by the results.
• C) A and B
• D) none of the above

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