For This Question,assume the Interest Parity Conditions Holds

question 45

Multiple Choice

For this question,assume the interest parity conditions holds.Also assume that the domestic interest rate is 9% and that the foreign interest rate is 5%.Given this information,we would expect that

• A)individuals will only hold foreign bonds.
• B)individuals will only hold domestic bonds.
• C)the domestic currency is expected to appreciate by 4%.
• D)the domestic currency is expected to depreciate by 4%.

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