Which of the following is the best definition of interest rate parity (IRP) .
A) British and Irish government securities, including issues of local British authorities and some overseas public-sector offerings.
B) The condition stating that the interest rate differential between two countries is equal to the difference between the forward exchange rate and the spot exchange rate.
C) The theory that real interest rates are equal across countries.
D) Agreement to exchange currency at some time in the future.
E) The agreed-on exchange rate to be used in a forward trade.
Correct Answer:
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