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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 is indifferent between investing the funds in the United States or Argentina because real returns will always be the same in the end.

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 cannot invest in Argentina because his company is investing dollars.

D) The manager should invest the funds in Argentina and make an extra $30,000 for the year.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92167119

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