The interest rate for us and european savings equals

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Reference no: EM13853900

Assume a US saver with $1,000 to place in a domestic or European bank CD.

The interest rate for US and European savings equals 4%.

Saving time period = 1 year

E = $1.00 (dollars per euro)

F = $1.02 (dollars per euro)

If the saver keeps her money in the US, her return equals ____. If the saver moves her money to Europe with a forward taken out at the time of purchase, her total return equals ____:

A. 4%, 6%.

B. 6%, 4%.

C. 4%, 4%.

D. 4%, 2%.

Reference no: EM13853900

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