Assume That British Interest Rates Are Higher Than U

question 30

Multiple Choice

Assume that British interest rates are higher than U.S. rates, and that the spot rate equals the forward rate. Covered interest arbitrage puts ____ pressure on the pound's spot rate and ____ pressure on the pound's forward rate.​

• A) ​downward; downward
• B) ​downward; upward
• C) ​upward; downward
• D) ​upward; upward

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Definitions:

Agonist

A chemical or drug that binds to receptors in the brain and causes a reaction, often mimicking the action of naturally occurring substances.

Reuptake

The absorption by a presynaptic nerve ending of a neurotransmitter that it has secreted, critical in regulating neurotransmitter levels and influencing neural communication.

Performance Anxiety

Anxiety over sexual performance that interferes with sexual functioning.

Spectatoring

The process of mentally observing and evaluating one's own sexual performance, often leading to anxiety and sexual dysfunction.