Multiple Choice
Which of the following is an example of interest rate parity?
A) The Japanese yen trades at the same exchange rate as the Swiss franc.
B) U.S.dollar rates on one year U.S.Treasury securities equal 1 year Japanese government bond rates.
C) U.S.dollar rates on one year U.S.Treasury securities equal 1 year Japanese government bond rates, restated in dollars.
D) British pound 2 year forward rates equal 2 year Swiss franc forward rates.
E) All currency exchange rates and interest rates move in unison.
Correct Answer:

Verified
Correct Answer:
Verified
Q19: Your U.S.bank issues a one-year U.S.CD at
Q20: Suppose that the current spot exchange rate
Q21: Your U.S.bank issues a one-year U.S.CD at
Q22: The Federal Reserve estimates that _ financial
Q23: The use of an exchange rate forward
Q25: The following are the net currency
Q26: The market in which foreign currency is
Q27: The greater the volatility of foreign exchange
Q28: The decline in European FX volatility during
Q29: The one-year CD rates for financial institutions