If the Spot Rate for Euros Depreciates, and All Other

question 141

Multiple Choice

If the spot rate for euros depreciates, and all other variables and expected values remain constant, U.S. investors contemplating European investments would:

• A) get larger returns in terms of dollars.
• B) get smaller returns in terms of dollars.
• C) get very similar returns because of arbitrage.
• D) lose the principal of the investment.

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