Which of the Following Reasons Explain Why Interest Rate Parity

question 55

Multiple Choice

Which of the following reasons explain why interest rate parity may not hold perfectly?
I.Transaction costs
II.Business loan risks
III.Offshore risk accounting rules
IV.Political risk

• A) I only
• B) II and III
• C) I and IV
• D) I, III, and IV

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Definitions:

Twins Produced

The result of a pregnancy that yields two offspring at the same birth, either identical or fraternal.

Double Helix

The structure formed by double-stranded molecules of nucleic acids, such as DNA, characterized by a spiral shape.

Down Syndrome

A genetic disorder caused by the presence of an extra chromosome 21, characterized by physical growth delays, characteristic facial features, and intellectual disability.

21st Pair of Chromosomes

One of the 23 pairs of chromosomes in humans, with abnormalities in this pair linked to genetic disorders such as Down syndrome.