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4. Suppose you have $1000 to invest for one year. The annual interest rate on a dollar account in the US. is 2%, the interest

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4. Suppose you have $1000 to invest for one year. The annual interest rate on a dollar account in the US. is 2%, the interest rate on a euro account in Europe is 1%. The expected appreciation of the euro over the year relative to the dollar is 2%. Which investment is better? (a) dollar account (b) euro account (c} they are equivalent {d} not enough information 5. Which property is violated in the problem in the question above (question 4)? (a) uncovered interest rate parity (b) real interest rate parity (c} covered interest rate parity (d) purchasing power parity

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