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The Main Factor That Makes the Eurocurrency Market Attractive to Both

Question 68

Multiple Choice

The main factor that makes the eurocurrency market attractive to both depositors and borrowers is that:


A) it allows banks to offer lower interest rates to cash depositor on home currency deposits than on deposits made in eurocurrency.
B) it lacks government regulation and banks are given much more freedom in their dealings in foreign currencies.
C) it allows banks to charge borrowers a lower interest rate for borrowings in the home currency than for borrowings in eurocurrency.
D) the spread between the eurocurrency deposit rate and lending rate is more than the spread between the domestic deposit and lending rates.

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