Assume That the Uncovered Interest Parity Condition Holds

question 57

Multiple Choice

Assume that the uncovered interest parity condition holds. Also assume that the Australian interest rate is greater than the Japanese interest rate. Given this information, we know that investors expect:

• A) the Australian interest rate to fall.
• B) the yen to depreciate.
• C) the Australian dollar- pound exchange rate to remain fixed.
• D) the Australian dollar to appreciate.
• E) the yen to appreciate.

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Definitions:

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The confidence in the integrity, ability, and character of an individual or organization.

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