If IRP Fails to Hold

question 98

Multiple Choice

If IRP fails to hold

• A)pressure from arbitrageurs should bring exchange rates and interest rates back into line.
• B)it may fail to hold due to transactions costs.
• C)it may be due to government-imposed capital controls.
• D)all of the above

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Definitions:

OECD Convention

An international agreement established by the Organisation for Economic Co-operation and Development aimed at combating bribery of foreign public officials in business transactions.

Price Fixing

An agreement between participants on the same side in a market to buy or sell a product, service, or commodity only at a fixed price, or maintain the market conditions such that the price is maintained at a given level by controlling supply and demand.

Criminally Liable

The legal responsibility for committing a crime, where an individual is subject to prosecution and potential punishment under criminal law.

Subjective Fault

A legal concept pertaining to the personal and individual blame or responsibility one has due to their own mental state or intentions.