If the spot rate for euros depreciates, and all other variables and expected values remain constant, U.S. investors contemplating European investments would:
A) get larger returns in terms of dollars.
B) get smaller returns in terms of dollars.
C) get very similar returns because of arbitrage.
D) lose the principal of the investment.

Question

Quizplus · Accepted Answer

If the spot rate for euros depreciates, U.S. investors would get smaller returns in terms of dollars because they would receive fewer dollars for each euro earned.

If the Spot Rate for Euros Depreciates, and All Other