A disadvantage of the euro is that the development of a pan-European,

QUESTION

A disadvantage of the euro is that the development of a pan-European, euro-denominated capital market will decrease the range of investment options open to both individuals and institutions.

Indicate whether the statement is true or false.

ANSWER

FALSE
An advantage of the euro is that the development of a pan-European, euro-denominated capital market will increase the range of investment options open to both individuals and institutions. This will enable European investors to better diversify their risk, which again lowers the cost of capital, and should also increase the efficiency with which capital resources are allocated.