19. Assume that in recent months, most currencies of industrialized countries depreciated substantially against the dollar. Assume that their interest rates were similar to the U.S. interest rate. If non-U.S. firms invested in U.S. Treasury securities during this period, their effective yield would have been:A) negative.B) zero.C)positive, but less than the interest rate of their respective countries.D)more than the interest rate of their respective countries.ANSWER:
D 20. According to _______, the effective yield earned by U.S. investors will be the same as the effective yield earned by non-U.S. investors in any given period.
D 21. Assume Costner Corporation, a U.S.-based MNC, invests 2,500,000 Zambian kwacha (ZMK) for a one-year period at a nominal interest rate of 9%. At the time the loan is extended, the spot rate of the kwacha is $.00060. If the spot rate of the kwacha in one year is $.00056, the dollar amount initially invested in Zambia is $__________, and $___________ are paid out after one year.