Assume the U

question 45

Multiple Choice

Assume the U.S. interest rate is 2% higher than the Swiss rate, and the forward rate of the Swiss franc has a 4% premium. Given this information:

• A) Swiss investors who attempt covered interest arbitrage earn the same rate of return as if they invested in Switzerland.
• B) U.S. investors who attempt covered interest arbitrage earn a higher rate of return than if they invested in the U.S.
• C) A and B
• D) none of the above

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Definitions:

Active Listening

A communication technique that involves paying full attention, understanding, responding, and remembering what is being said.

Nonverbal Cues

Forms of communication without the use of spoken language, such as gestures, body language, facial expressions, and eye contact.

Eye Contact

The act of looking directly into another person's eyes, often used as a means of communication, to convey confidence or establish connection.

Decoding Process

The act of interpreting or understanding communication signals or messages received.