Which Statement Best Describes How Rate of Return Parity Happens

question 90

Multiple Choice

Which statement best describes how rate of return parity happens?

• A) The expected depreciation of the Canadian dollar is currently lowering demand for it.
• B) The price of apples is the same in Canada and the U.S., adjusting for the exchange rate.
• C) The market feeling is that the Canadian dollar is overvalued and will likely appreciate.
• D) The recent high Canadian interest rate has decreased the supply of Canadian dollars.
• E) None of the above.

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