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In a Graph Illustrating the Determination of the Exchange Rate

Question 76

Multiple Choice

In a graph illustrating the determination of the exchange rate that has the yen-dollar exchange rate on the vertical axis and the expected rate of return, in dollars terms, from investing in a U.S. or Japanese asset on the horizontal axis, the line representing R, the return on a U.S. asset in dollar terms, is


A) a vertical line.
B) a horizontal line.
C) an upward-sloping line.
D) a downward-sloping line.

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