Reference no: EM13566934

1) If the interest rate on euro-denominated assets is 13 percent and it is 15 percent on peso-denominated assets, and if the euro is expected to appreciate at a 4 percent rate, for Manuel the Mexican the expected rate of return on euro-denominated assets is

A) 11 percent.

B) 13 percent.

C) 17 percent.

D) 19 percent.

2) If the interest rate on euro-denominated assets is 13 percent and it is 15 percent on peso-denominated assets, and if the euro is expected to appreciate at a 4 percent rate, for Francois the Frenchman the expected rate of return on peso-denominated assets is

A) 11 percent.

B) 15 percent.

C) 17 percent.

D) 19 percent.

3) With a 10 percent interest rate on dollar deposits, and an expected appreciation of 7 percent over the coming year, the expected return on dollar deposits in terms of the foreign currency is

A) 3 percent.

B) 10 percent.

C) 13.5 percent.

D) 17 percent.