If Interest Rate Parity Holds,the Currency of the Country with the Relatively

question 50

Multiple Choice

If interest rate parity holds,the currency of the country with the relatively _______ interest rates will trade at a forward _______ to the country with the relatively high interest rate.

• A) low; discount
• B) low; premium
• C) low; loss
• D) none of the given choices

---

Definitions:

Synthesize

To combine various elements or ideas into a coherent and unified whole, often generating new insight or understanding.

Perceptual Selection

The psychological process by which individuals screen and select various stimuli that vie for their attention, filtering out some data while allowing other data to enter perception.

Contrast

The state of being strikingly different from something else in juxtaposition or close association.

Intensity

Refers to the degree of strength, force, or energy possessed by a process, phenomenon, or emotion.