The Theory That Real Interest Rates Are Equal Across Countries

question 75

Multiple Choice

The theory that real interest rates are equal across countries is called:

• A) the unbiased forward rates condition.
• B) uncovered interest rate parity.
• C) the international Fisher effect.
• D) purchasing power parity.
• E) interest rate parity.

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Definitions:

Probability

Probability quantifies the likelihood of an event happening, ranging from 0 (impossibility) to 1 (certainty).

Independent Events

Two or more events that have no influence on each other's outcomes.

Short Words

Brief and concise words, often used to enhance clarity and comprehension in communication.

Brooklyn Dodgers

A historic Major League Baseball team known for breaking the color barrier when they signed Jackie Robinson in 1947.