The Covered Interest Rate Parity Condition Can Be Stated as Follows

question 13

Multiple Choice

The covered interest rate parity condition can be stated as follows: The interest rate on dollar deposits equals the interest rate on euro deposits ________ the forward ________ on euros against dollars.

• A) plus; premium
• B) minus; premium
• C) plus; discount
• D) minus; discount
• E) times; premium

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Definitions:

Defense Mechanism

psychological strategies brought into play by the unconscious mind to manipulate, deny, or distort reality in order to defend against feelings of anxiety and unacceptable impulses.

Repression

A defense mechanism where distressing thoughts and feelings are unconsciously blocked from conscious awareness.

Pervasive

Having the tendency to spread widely throughout an area or group of people.

Latency Period

A phase in psychosexual development, occurring from about age 6 to puberty, characterized by a decrease in sexual interests and activities.