A Constant Differential Between the Interest Rates of Two Countries

question 21

Multiple Choice

A constant differential between the interest rates of two countries over different terms to maturity implies that future changes in the exchange rate are expected to occur at which rate?

• A) constant
• B) increasing
• C) decreasing
• D) None of the above

---

Definitions:

Wilcoxon Signed Rank

A non-parametric statistical test used to compare two paired samples, assessing whether their population mean ranks differ.

Paired Two-sample T-test

A statistical test used to compare two population means where you have two samples in which observations in one sample can be paired with observations in the other sample.

Wilcoxon Signed Rank

The Wilcoxon Signed Rank Test is a non-parametric statistical test used to compare two related samples, matched samples, or repeated measurements on a single sample to assess differences in their population mean ranks.

Normally Distributed

Describes a statistical distribution that is symmetric around the mean, showing that data near the mean are more frequent in occurrence.