Interest Rate Parity Occurs When

question 135

Multiple Choice

Interest rate parity occurs when

• A)the interest rate in one currency equals the interest rate in another currency when exchange rate changes are taken into account.
• B)interest rates no longer affect the exchange rate.
• C)prices are equal across nations when exchange rates are taken into account.
• D)interest rate differentials are always maintained across nations.
• E)interest rates are equal across nations.

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