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

---

Definitions:

Sample Space

The set of all possible outcomes of a statistical experiment.

Outcome

The result or final product of an event, process, or action.

An Event

In probability and statistics, an outcome or a set of outcomes from an experiment or situation.

Probabilities

The measure of the likelihood that an event will occur, often expressed as a number between 0 and 1.