Suppose the U.S. foreign assets are 73 percent of the U.S. GDP, and the U.S. foreign liabilities are 95 percent of the U.S. GDP. Moreover, suppose that 56 percent of U.S. foreign assets are denominated in foreign currencies, while all liabilities to foreigners are denominated in U.S. dollars. How will a 14 percent depreciation of the dollar affect foreigners' net foreign claims on the U.S. measured in U.S. dollars (as a percent of U.S. GDP)? (You will need a calculator. Round your answer to the whole percentage point, no decimals.) Foreigners will experience a net capital loss equal to percent of U.S. GDP.
Suppose the U.S. foreign assets are 73 percent of the U.S. GDP, and the U.S. foreign liabilities are 95 percent of the U.S. GDP. Moreover, suppose that 56 percent of U.S. foreign assets are denominated in foreign currencies, while all liabilities to foreigners are denominated in U.S. dollars. How will a 14 percent depreciation of the dollar affect foreigners' net foreign claims on the U.S. measured in U.S. dollars (as a percent of U.S. GDP)? (You will need a calculator. Round your answer to the whole percentage point, no decimals.) Foreigners will experience a net capital loss equal to percent of U.S. GDP.
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 the U.S. foreign assets are 73 percent of the U.S. GDP, and the U.S. foreign liabilities are 95 percent of the U.S. GDP. Moreover, suppose that 56 percent
of U.S. foreign assets are denominated in foreign currencies, while all liabilities to foreigners are denominated in U.S. dollars.
How will a 14 percent depreciation of the dollar affect foreigners' net foreign claims on the U.S. measured in U.S. dollars (as
percent of U.S. GDP)? (You will need
a calculator. Round your answer to the whole percentage point, no decimals.)
Foreigners will experience a net capital loss equal to
percent of U.S. GDP,
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