Multiple-Choice Question: 1. You planned a trip to Europe far in advance, and budgeted for the trip. When you get home, you find that the trip cost more than you were expecting. How might a change in the exchange rate between Canadian dollars and the Euro (European currency) account for this difference? A. The exchange rate has become less favorable to the Canadian dollar B. The exchange rate has become more favorable to the Canadian dollar C. change in the exchange rate would not explain the difference
Multiple-Choice Question: 1. You planned a trip to Europe far in advance, and budgeted for the trip. When you get home, you find that the trip cost more than you were expecting. How might a change in the exchange rate between Canadian dollars and the Euro (European currency) account for this difference? A. The exchange rate has become less favorable to the Canadian dollar B. The exchange rate has become more favorable to the Canadian dollar C. change in the exchange rate would not explain the difference
Chapter7: International Arbitrage And Interest Rate Parity
Section: Chapter Questions
Problem 51QA
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Multiple-Choice Question:
1. You planned a trip to Europe far in advance, and budgeted for the trip. When you get home, you find that the trip cost more than you were expecting. How might a change in the exchange rate between Canadian dollars and the Euro (European currency) account for this difference?
A. The exchange rate has become less favorable to the Canadian dollar
B. The exchange rate has become more favorable to the Canadian dollar
C. change in the exchange rate would not explain the difference
Please explain the reason of your answer & why can't it be the others. The answer is supposed to be A.
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