With a 10 percent interest rate on dollar deposits,and an expected appreciation of 7 percent over the coming year,the expected return on dollar deposits in terms of the foreign currency is

Question

Quizplus · Accepted Answer

The expected return on dollar deposits in terms of the foreign currency is the sum of the interest rate on dollar deposits (10%) and the expected appreciation of the dollar (7%), which equals 17%.

With a 10 Percent Interest Rate on Dollar Deposits,and an Expected