If Interest Rate Parity Does Not Hold, and the Forward

question 9

Multiple Choice

If interest rate parity does not hold, and the forward ____ is ____ the interest rate differential, then foreign financing with a simultaneous hedge of that position in the forward market results in higher financing costs than those of domestic financing.

• A) premium; higher than
• B) discount; higher than
• C) premium; less than
• D) premium; higher than AND discount; higher than

---

Definitions:

Cognitive-Behavioural Therapy

A psychotherapeutic approach that addresses dysfunctional emotions, behaviors, and cognitions through a goal-oriented, systematic process.

Family Therapy

A type of psychological counseling that helps family members improve communication and resolve conflicts in a therapeutic setting, often involving multiple family members in the treatment process.

Psychoeducation

The process of educating patients about their psychological disorders, including symptoms, treatments, and coping strategies.

Social Skills Training

The teaching of appropriate and effective social communication and interpersonal behaviour.