Interest Rate Parity (IRP) Implies That

Multiple Choice

Interest rate parity (IRP) implies that:

A) international interest rates are irrelevant to exchange rate behaviour.
B) market interest rates for similar risk instruments tend to equate across countries on an exchange- rate- adjusted basis.
C) the annual depreciation of the home currency equals the foreign interest rate.
D) the forward rate (F) plus the spot rate (S) equals the interest rate (R) .