Question

If the dollar interest rate is 10 percent, the euro interest rate is 6 percent, and the expected return on dollar depreciation against the euro is zero percent, then
A. an investor should invest only in dollars.
B. an investor should invest only in euros.
C. an investor should be indifferent between dollars and euros.
D. It is impossible to tell given the information.
E. All of the above.

Answer 1

A. an investor should invest only in dollars.

Answer 2

Answer:C

Explanation:Becuase if the difference is zero so they are in same position