If Interest Rate Parity (IRP) Exists, Then Foreign Investors Will

question 17

True/False

If interest rate parity (IRP) exists, then foreign investors will earn the same returns as U.S. investors.

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Definitions:

Chaining

A method of teaching complex behaviors by breaking down the task into small steps and teaching each step within the sequence individually until the whole sequence is mastered.

Positive Reinforcement

A technique used in behavioral psychology to increase the likelihood of a desired behavior by rewarding it.

Stimulus Discrimination

The learned ability to differentiate between similar stimuli and respond appropriately to each.

Stimulus Generalization

The process by which a response that has been learned to one stimulus is elicited by a different, but similar, stimulus.