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Suppose You Have One U

Question 60

Multiple Choice

Suppose you have one U.S.dollar with which you wish to purchase U.K.(one-year) bonds in period t.Which of the following expressions represents the amount of U.K.pounds you will receive in one year (i.e.,period t + 1) from purchasing U.K.bonds in period t?


A) i
B) 1 + i*
C) (1 + i*) Eᵉt₊₁ / Et
D) (1 + i*) Et / Eᵉt₊₁
E) none of the above

Correct Answer:

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