The Covered Interest Rate Parity Condition Can Be Stated as Follows

question 23

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 dollars against euros.

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

---

Definitions:

Current Asset

Asset expected to be converted into cash, sold, or consumed within a year or within the business's operating cycle.

Liability Subsections

The divisions within the liabilities section of a balance sheet, categorizing liabilities based on their nature or duration, such as current liabilities and long-term liabilities.

Long-Term Liabilities

Liabilities that usually will not be due for more than one year.

Net Income

The amount of profit left over after all expenses, taxes, and costs have been subtracted from total revenue.