Suppose That a Country Has External Wealth of $1 Billion

question 64

Multiple Choice

Suppose that a country has external wealth of $1 billion in 2014. What is the future value of this external wealth at the end of 2016, assuming a world interest rate of 10% per annum and no additions or subtractions to external wealth from trade balance surpluses or deficits during the period?

• A) $1.1 billion
• B) $1.2 billion
• C) $1.21 billion
• D) $0.812 billion

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Definitions:

Regression Analysis

A statistical process for estimating the relationships among variables.

Estimated Regression Equation

An equation derived from regression analysis that predicts the dependent variable based on the values of one or more independent variables.

Y-Intercept

The point at which a line or curve intersects the Y-axis of a graph.

Regression Source Table

A table containing statistical information that summarizes the output of a regression analysis.