Assume That the U

question 48

Multiple Choice

Assume that the U.S. interest rate is 10%, while the British interest rate is 15%. If interest rate parity exists, then:

• A) British investors who invest in the United Kingdom will achieve the same return as U.S. investors who invest in the U.S.
• B) U.S. investors will earn a higher rate of return when using covered interest arbitrage than what they would earn in the U.S.
• C) U.S. investors will earn 15% whether they use covered interest arbitrage or invest in the U.S.
• D) U.S. investors will earn 10% whether they use covered interest arbitrage or invest in the U.S.

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Definitions:

Supernatural

Refers to phenomena or entities beyond the laws of nature and the observable universe, often attributed to divine, mystical, or ghostly origins.

Practiced Religion

The engagement in or observance of rituals, ceremonies, and moral codes associated with a particular faith or belief system.

Universal

Something that is applicable everywhere or in all cases, often used to describe concepts, principles, or conditions that are globally recognized.

Anthropologists

Scientists who study human behavior, culture, and societies, both past and present, through various perspectives and methods.