Suppose that expectations are not taken into account and US investors shift their funds into Europe. Once they cash in on their capital gains, they will need to repatriate their profits. In doing so, the demand for dollars increases and the dollar appreciates relative to the euro or, alternatively, the euro depreciates against the dollar. What financial aspects do the US investors need to look at before deciding to invest in Europe?
Suppose that expectations are not taken into account and US investors shift their funds into Europe. Once they cash in on their capital gains, they will need to repatriate their profits. In doing so, the demand for dollars increases and the dollar appreciates relative to the euro or, alternatively, the euro depreciates against the dollar. What financial aspects do the US investors need to look at before deciding to invest in Europe?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Transcribed Image Text:Suppose that expectations are not taken into account and US investors shift their
funds into Europe. Once they cash in on their capital gains, they will need to
repatriate their profits. In doing so, the demand for dollars increases and the
dollar appreciates relative to the euro or, alternatively, the euro depreciates
against the dollar.
What financial aspects do the US investors need to look at before deciding to
invest in Europe?
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