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How would you expect the euro to move

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Reference no: EM132198774

Suppose the current exchange rate is $1 buys .8474Euro, and key interest rates in the US are at 1% while they are at 3.5% in Europe.

A If my stock in the European stock market rises by 20%, what movement would need to occur to cause me to lose money on my transaction (when accounted for in dollars-the term in question is 1 year)?

B If the US Federal Reserve raises interest rates, how would you expect the Euro to move (appreciate or depreciate)?

Reference no: EM132198774

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