The effective return from a foreign investment is
A) the domestic interest rate plus the forward premium (discount) .
B) the foreign interest rate plus the forward premium (discount) .
C) the nominal interest rate minus inflation.
D) the real interest rate.
Correct Answer:
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Q2: Suppose that the effective return to a
Q3: Suppose that in the United States and
Q4: If the 12-month interest rates for the
Q5: Given that real interest rates are constant,an
Q6: We can expect very small deviations from
Q7: If the term structure of interest rates
Q8: When one country has higher nominal interest
Q9: Nominal interest rates tend to be higher
Q10: Careful studies of the data indicate that
Q11: The interest parity condition indicates that the
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