Assume the U.S. one-year interest rate is 11% and the French one-year interest rate is 18%. The break-even level of depreciation in the euro at which the U.S. and French investments would exhibit the same return to a U.S. investor is:
A) about 5.1%.
B) about 6.8%.
C) about 6.3%.
D) about 5.9%.
Correct Answer:
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