Multiple Choice
Assume that the interest parity condition holds. Also assume that the Australian interest rate is 5% while the U.K. interest rate is 7%. Given this information, financial markets expect the pound to:
A) appreciate by 6%.
B) appreciate by 2%.
C) depreciate by 2%.
D) appreciate by 4%.
E) depreciate by 4%.
Correct Answer:
Verified
Correct Answer:
Verified
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