If Interest Rate Parity Exists, and the Forward Rate Is

question 12

Multiple Choice

If interest rate parity exists, and the forward rate is an accurate estimator of the future spot rate, the foreign financing rate will be ____ the home financing rate.

• A) lower than
• B) greater than
• C) similar to
• D) None of these are correct.

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Definitions:

Rational Emotive Behavior Therapy

A form of psychotherapy that helps individuals identify and change irrational beliefs, reducing emotional pain and behavioral issues.

Distressing Feelings

Unpleasant emotional responses that can result from a wide range of situations, including stress, fear, or grief.

Symptoms

Symptoms are the signs or manifestations of a disease or condition, observed by an individual, indicating the presence of an ailment.

Cognitive-Behavioral Therapies

A group of psychotherapies that treat problems by modifying dysfunctional emotions, behaviors, and thoughts.