An MNC has determined that the degree of appreciation for the Singapore dollar that equates the foreign and domestic yield is 2 percent. If the Singapore dollar appreciates by less than 2 percent, the investment in Singapore will be more attractive.

Question

Quizplus · Accepted Answer

If the Singapore dollar appreciates by less than 2 percent, it would mean that the foreign yield is still higher than the domestic yield, leading to a more attractive investment in the foreign country. Therefore, the degree of appreciation for the Singapore dollar that equates the foreign and domestic yield would be higher than 2 percent.

An MNC Has Determined That the Degree of Appreciation for the Singapore