Solnik (1984) examined the effect of exchange rate changes, interest rate differentials, the level of the domestic interest rate, and changes in domestic inflation expectations. He found that

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Solnik (1984) found that international monetary variables had only a weak influence on equity returns in comparison to domestic variables. Therefore, option A is the best choice. Option B is incorrect because it suggests that international monetary variables have a stronger influence than domestic variables, which is not supported by Solnik's findings. Option C is also incorrect because it suggests that international monetary variables have no influence at all, which is not true according to Solnik's study. Option D is incorrect because option A is the best choice.

Solnik (1984) Examined the Effect of Exchange Rate Changes, Interest