The Condition That Relates Interest Rate Differentials Between Countries to the Percentage

question 176

Multiple Choice

The condition that relates interest rate differentials between countries to the percentage difference between their forward and spot exchange rates is called:

• A) The unbiased forward rates condition.
• B) Uncovered interest rate parity.
• C) The international Fisher effect.
• D) Purchasing power parity.
• E) Interest rate parity.

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