11)Answer based on the following: Interest rate on U.S. assets =5%, interest rate on European assets = 12%, the spot rate ofexchange = 0.90 Euros/$, the one year forward rate of exchange =0.95 EUROS/$. The European citizen should hold which asset?

	1) The Euro asset
	2) The Dollar asset

12)If real interest rates in Canada are above those in the Euroarea,

	1) The Euro area is likely to see an appreciation of itscurrency.
	2) There will be more demand for Canadian goods resulting from thechange in exchange rates.
	3) There will be more demand for European goods resulting from thechange in exchange rates.
	4) Exchange rates will not be affected.

13)If there is more demand for U.S. stocks relative to stocksissued elsewhere,

	1) The Dollar may depreciate
	2) The Dollar may appreciate

14)Horizontal FDI involves

	1) Doing some part of the production process abroad
	2) Duplicating a firm’s plant abroad
	3) Accessing cheap labor abroad
	4) None of the above

15)Based on the offshoring articles that you read for thisclass

	1) The center of gravity of much of the world production has notchanged
	2) The center of gravity of much of the world production haschanged from advanced countries to developing countries
	3) The center of gravity of much of the world production remains inadvanced countries
	4) None of the above.