Which One of the Following States That the Difference in Interest

question 34

Multiple Choice

Which one of the following states that the difference in interest rates between two countries is equal to the percentage difference between the forward exchange rate and the spot exchange rate?

• A)Arbitrage equilibrium
• B)Relative purchasing power parity
• C)Absolute purchasing power parity
• D)Interest rate parity
• E)Cross-rate parity

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