Assume That the Interest Rate in the Home Country of Currency

question 89

Multiple Choice

Assume that the interest rate in the home country of Currency X is much higher than the U.S. interest rate. According to interest rate parity, the forward rate of Currency X:

• A) should exhibit a discount
• B) should exhibit a premium
• C) should be zero (i.e., it should equal its spot rate)
• D) should exhibit a premium or should be zero (i.e., it should equal its spot rate)

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Definitions:

Professional Liability

Professional liability involves the legal responsibility of professionals, such as doctors or lawyers, to compensate for harm caused by their negligence or errors in service.

Specific Professions

Particular occupations or lines of work that require special training, education, or skill.

Commercial General Liability Policy

A policy that generally provides protection for the insured for bodily injury, as well as for third parties for property injury.

Broad Range

Refers to an extensive variety or a wide spectrum of items, ideas, or options available.