Which of the Following Appears to Be a Safe Assumption

question 36

Multiple Choice

Which of the following appears to be a safe assumption when there is no difference between the forward and spot exchange rates between two currencies?

• A) The countries have equal nominal interest rates.
• B) The spot rate is expected to change.
• C) Expected inflation is less than the nominal rate.
• D) Both currencies are selling at a premium relative to the other.

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