With Perfect Capital Mobility Uncovered Interest Parity Always Holds Because

Multiple Choice

With perfect capital mobility uncovered interest parity always holds because:

A) almost unlimited flows of capital can occur if there is any deviation from the parity.
B) lower domestic interest rates trigger hedging to avoid exchange rate risks.
C) capital flows out at a much faster rate than it flows in if the interest rate changes.
D) the no-arbitrage condition cannot be satisfied without using forward contract.