Assume that the level of interest rates is about the same in the US and in the UK. You buy a British pound today at $1.10/pound and sell it after 1 year for $1.17/pound . In this case, you difference in return from holding pounds instead of dollars was a___ of ____. A. loss, 7% B. loss, 6.36 % C. gain , 7 % D. gain, 6.36%
Assume that the level of interest rates is about the same in the US and in the UK. You buy a British pound today at $1.10/pound and sell it after 1 year for $1.17/pound . In this case, you difference in return from holding pounds instead of dollars was a___ of ____. A. loss, 7% B. loss, 6.36 % C. gain , 7 % D. gain, 6.36%
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter29: Exchange Rates And International Capital Flows
Section: Chapter Questions
Problem 23CTQ: Why would a nation dollarize—that is, adopt another countrys currency instead of having its own?
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Assume that the level of interest rates is about the same in the US and in the UK. You buy a British pound today at $1.10/pound and sell it after 1 year for $1.17/pound . In this case, you difference in return from holding pounds instead of dollars was a___ of ____.
A. loss, 7%
B. loss, 6.36 %
C. gain , 7 %
D. gain, 6.36%
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