Question

Assume that an American company today invests some of its spare cash in a Hungarian money market account that will earn 8 percent for a period of two months. Which of the following, if it happens during the next two months, would imply that the company will earn less than 8 percent on its investment?
A. The Hungarian forint rises in value against the dollar.
B. Interest rates in the United States move down.
C. Short-term interest rates in Hungarian money markets shoot up.
D. The dollar appreciates against the Hungarian forint.

Answer 1

Answer:

D. The dollar appreciates against the Hungarian forint.

Explanation:

If after investing, it happens during the next two months that the dollar invested by the American company appreciates against the Hungarian forint.

It would imply that the company will earn less than 8 percent on its investment.

Answer 2

Answer:

Answer is D. The dollar appreciates against the Hungarian forint.

Refer below.

Explanation:

Assume that an American company today invests some of its spare cash in a Hungarian money market account that will earn 8 percent for a period of two months. If it happens during the next two months, would imply that the company will earn less than 8 percent on its investment:

The dollar appreciates against the Hungarian forint.