16. Assume that the U.S. and Chile nominal interest rates are equal. Then, the U.S. nominal interest rate remains unchanged while the Chilean nominal interest rate remains stable. According to the international Fisher effect, this implies expectations of ____ than before, and that the Chilean peso should ____ against the dollar.

a.	lower U.S. inflation; depreciate
b.	lower U.S. inflation; appreciate
c.	higher U.S. inflation; depreciate
d.	higher U.S. inflation; appreciate
e.	No Answer

17. Assume the standard deviation of the U.S. market portfolio is 18.2%, the standard deviation of the nonU.S. portion of the world portfolio is 17.1%, and the correlation between the U.S. and nonU.S. market portfolios is .47. Suppose you invest 45% of your money in the U.S. stock market and the other 55% in the nonU.S. portfolio. What is the coefficient of variation of your portfolio?

a) 17.7%

b) 9.4%

c) 15.1%

d) 18.3%

e) No Answer

18. Suppose the spot direct quotes for the pound sterling and euro are $1.398289 and $.123034, respectively. What is the direct quote for the pound in Paris?

a) 1.1339-73/

b) .8793-.8819/

c) .080812/

d) .097687/

e) No Answer