The demand by foreign investors for the stock of a U.S. firm sold on a U.S. exchange may be higher when the dollar is expected to ____, other things being equal. (Assume the firm's operationsareunaffected by the value of the dollar.)
A) strengthen
B) weaken
C) stabilize
D) B and C

Question

Quizplus · Accepted Answer

When the dollar is expected to strengthen, foreign investors have to pay relatively less in their own currency to purchase shares of the U.S. firm. This makes the investment more attractive for them, leading to higher demand for the stock.

The Demand by Foreign Investors for the Stock of a U.S