... 36) The Law of One Price is more likely to apply to money than to commodities. A) TRUE B) FALSE. 37) The Fisher Effect holds that nominal interest rates vary inversely with expected inflation. A) TRUE B) FALSE. odol (0 2Uoldevag o oge d ell 12IAL(8 38) PPPT applies equally to services and commodities. A) TRUE B) FALSE. SUAT (A 39) Today the spot rate is $1.15 per euro and a U.S. investor buys one million dollars of a European mutual fund at a price of 20 per share. One the shares have appreciated to 24. What rate of return would he have earned in U.S. dollars if the spot rate at that point is $1 per euro? A) 20% B) 15% C) 12% D) 10% E) 4.35%. year later 32JAR (E ould the .bave cout2 ei ti seood yono ngnone a'blow odi zi elob .2.U oriT (EE blo 0) If interest rates in Canada are much higher than in the U.S., a covere aterest arbitrage consisting of borrowing in the U.S. and lending in Cane Fll yield a pure profit. TRUE FALSE. couznuc2 (8) bras (A) d. (O) bon (A) by hodging with calis versus heduing with a forward contr ld tiepet ntaa tshormplomoissimom? inoruo aellob .2.U odhlo amst ni 2sten