The Interest Parity Condition Indicates That the Domestic Interest Rate

question 41

Multiple Choice

The interest parity condition indicates that the domestic interest rate must be equal to

• A)the foreign interest rate.
• B)the expected rate of depreciation of the domestic currency.
• C)the expected rate of appreciation of the domestic currency.
• D)the foreign interest rate minus the expected rate of appreciation of the foreign currency.
• E) none of the above

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