The Proposition Stating That the Discounted Spread Between Domestic and Foreign

question 46

Multiple Choice

The proposition stating that the discounted spread between domestic and foreign interest rates equals the percentage spread between forward and spot exchange rates is called:

• A)Interest rate parity theorem
• B)Domestic and foreign interest rate agreement
• C)Percentage spread theorem
• D)None of the listed options are correct.

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Definitions:

Ocean-floor Sediments

Deposits that cover the ocean floor, comprised of particles of organic and inorganic origin, such as sand, silt, and the remains of marine organisms.

Fossil Fuels

Natural fuels formed from the remains of living organisms over millions of years, including coal, oil, and natural gas.

Sedimentary Rocks

Rocks formed by the accumulation and consolidation of sediment, which can include minerals and organic matter, typically found in layered deposits.

Fractured Granitic

Describes granitic rock that has been broken or cracked, often by natural processes such as tectonic movement or weathering.