When Interest Rate Parity (IRP)holds Between Two Different Countries X

question 7

Multiple Choice

When Interest Rate Parity (IRP) holds between two different countries X and Y,your decision to invest your money will:

• A) be indifferent between country X and country Y.
• B) not involve forward hedging.
• C) depend on which country initiated the IRP.
• D) not involve the foreign exchange rates.

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