Suppose That: If the 3-Month Interest Rate on Dollars

question 124

Multiple Choice

Suppose that: If the 3-month interest rate on Dollars is 3.5% (effective annual rate) , what do you think is the 3-month sterling (U.K.) interest rate?

• A)1.07%
• B)2.07%
• C)3.07%
• D)4.07% We can utilize the interest rate parity theorem:

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Definitions:

Prostaglandin

Class of physiologically active substances present in many tissues; among its effects are vasodilation, stimulation and contraction of uterine smooth muscle and the promotion of inflammation and pain.

Glucocorticoids

These are a class of corticosteroids that play a role in glucose metabolism, anti-inflammatory processes, and immune system modulation.

Congenital Birth Defects

Conditions present at birth that can affect the structure and function of a baby, varying widely from mild to life-threatening.

Teratogen

Any agent or factor that causes malformation of an embryo.