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The Interest Parity Condition Indicates That the Domestic Interest Rate

Question 41

Multiple Choice

The interest parity condition indicates that the domestic interest rate must be equal to


A) the foreign interest rate.
B) the expected rate of depreciation of the domestic currency.
C) the expected rate of appreciation of the domestic currency.
D) the foreign interest rate minus the expected rate of appreciation of the foreign currency.
E) none of the above

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