Which of the Following Is Not True Regarding IRP, PPP

question 1

Multiple Choice

Which of the following is not true regarding IRP, PPP, and the IFE?

• A) IRP suggests that a currency's spot rate will change according to interest rate differentials.
• B) PPP suggests that a currency's spot rate will change according to inflation differentials.
• C) The IFE suggests that a currency's spot rate will change according to interest rate differentials.
• D) All of the above are true.

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Definitions:

Temporary Accounts

Accounts that are closed at the end of each accounting period, including revenue, expense, and withdrawal accounts, used to track transactions for a particular period.