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borteleto borteleto
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5 years ago
A corporate investment manager needs to invest $1,000,000 for the next 6 months. The current nominal rate of interest in the United States is 5%, while the nominal rate of interest in Argentina is 8%. Which of the following statements is MOST correct?
A) The manager should invest the funds in Argentina and make an extra $30,000 for the year.
B) The manager may decide to invest the funds in the United States due to the international Fisher effect, which suggests inflation in Argentina may make the extra interest income worth less in one year.
C) The manager is indifferent between investing the funds in the United States or Argentina because real returns will always be the same in the end.
D) The manager cannot invest in Argentina because his company is investing dollars.
Textbook 
Foundations of Finance

Foundations of Finance


Edition: 9th
Authors:
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guzmanguzman
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borteleto Author
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#2
5 years ago
found this very helpful thank you
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