The Interest Rate in the U

question 29

Multiple Choice

The interest rate in the U.K. is 7%, while the interest rate in the U.S. is 5%. The spot rate for the British pound is $1.50. According to the international Fisher effect (IFE) , the British pound should adjust to a new level of:

• A) $1.47.
• B) $1.53.
• C) $1.43.
• D) $1.57.

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Definitions:

Asset Sale

The process of selling a company's assets, as opposed to selling the company's stock or shares.

Effective Date of Registration

The effective date of registration is the specific date on which a document, such as a company's securities registration, becomes officially valid and enforceable.

Securities Act

Refers to laws that regulate the issuance and trading of securities, such as stocks and bonds, to protect investors from fraud and ensure transparency in the financial markets.

Due Diligence Defense

A legal defense used in securities law where the accused party argues they conducted a comprehensive and reasonable investigation prior to an alleged wrongdoing.