Use the following table to answer the next two questions
European Expected value of the dollar in 3 months
Investor (dollars per euro)
Investor #1 $1.30
Investor #2 $1.20
Investor #3 $1.15
-If the current exchange value of the dollar is $1.25 per euro
A) European Investor #1 has less incentive to invest in the United States,and thus demands fewer dollars
B) European Investor #2 has less incentive to invest in the United States,and thus demands fewer dollars
C) European Investor #3 has less incentive to invest in the United States,and thus demands fewer dollars
D) all three European investors have less incentive to invest in the United States,and thus demands fewer dollars

Question

Quizplus · Accepted Answer

Investor #1 expects the dollar to be worth $1.30 per euro in 3 months, which is higher than the current rate of $1.25, indicating a potential gain, thus reducing their incentive to invest in the US.

Use the Following Table to Answer the Next Two Questions