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Using Actual Market Exchange Rates and Comparable Short-Term Interest Rates

Question 30

Multiple Choice

Using actual market exchange rates and comparable short-term interest rates for the major currencies:


A) uncovered interest parity is easier to test than covered interest parity.
B) we see that covered interest parity holds better between the currencies of countries that impose broad capital controls.
C) we see that deviations from uncovered interest parity occur only during times of crisis.
D) we see that covered interest parity usually holds well.

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