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    International Financial Management
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    Exam 7: International Arbitrage and Interest Rate Parity
  5. Question
    Interest Rate Parity Suggests That an Exchange Rate Should Change
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Interest Rate Parity Suggests That an Exchange Rate Should Change

Question 83

Question 83

True/False

Interest rate parity suggests that an exchange rate should change over time based on the difference in interest rates between foreign versus domestic risk-free interest-bearing securities as of today.

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