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The Interest Rate Parity Approximation Formula Is

Question 240

Multiple Choice

The interest rate parity approximation formula is:


A) Ft = S0 * [1 + (RFC + RCDN) ]t.
B) Ft = S0 * [1 - (RFC - RCDN) ]t.
C) Ft = S0 * [1 + (RFC - RCDN) ]t.
D) Ft = S0 * [1 + (RFC *RCDN) ]t.
E) Ft = S0 * [1 - (RFC + RCDN) ]t.

Correct Answer:

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