Multiple Choice
According to interest rate parity (IRP) :
A) the forward rate differs from the spot rate by a sufficient amount to offset the inflation differential between two currencies.
B) the future spot rate differs from the current spot rate by a sufficient amount to offset the interest rate differential between two currencies.
C) the future spot rate differs from the current spot rate by a sufficient amount to offset the inflation differential between two currencies.
D) the forward rate differs from the spot rate by a sufficient amount to offset the interest rate differential between two currencies.
Correct Answer:
Verified
Correct Answer:
Verified
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