The Condition Stating That the Expected Percentage Change in the Exchange

question 42

Multiple Choice

The condition stating that the expected percentage change in the exchange rate is equal to the difference in interest rates between the countries is called:

• A)the unbiased forward rates condition.
• B)uncovered interest parity.
• C)the international Fisher effect.
• D)purchasing power parity.
• E)interest rate parity.

---

Definitions:

Opinions

Personal views, judgments, or beliefs about a particular topic, which can vary widely between individuals.

Formal Reasoning

The ability to think logically and systematically about abstract concepts and hypothetical situations, typically developing during adolescence.

Nonconscious Responding

Processes that occur without conscious awareness or control, including physiological responses and some behaviors that are automatic or habitual.

"Reasonable."

Being in accordance with logic, fairness, or moderate estimation; often used to describe actions or thoughts that are justified under the circumstances.