If Interest Rate Parity (IRP) Exists, Then the Rate of Return

question 57

True/False

If interest rate parity (IRP) exists, then the rate of return achieved from covered interest arbitrage should be equal to the rate available in the foreign country.

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Definitions:

Ounces

A unit of weight in the avoirdupois system, equivalent to 1/16th of a pound or approximately 28.349 grams.

Cord

A unit of measure for wood, typically used for firewood or pulpwood, referring to a volume of 128 cubic feet.

Firewood

Wood that has been gathered or cut and is used primarily for fuel in a fire.

Pickup Truck

A vehicle with an enclosed cab and an open cargo area, usually with low sides and tailgate.