Points above the IRP line represent situations where:
A) covered interest arbitrage is feasible from the perspective of domestic investors and results in the same yield as investing domestically.
B) covered interest arbitrage is feasible from the perspective of domestic investors and results in a yield above what is possible domestically.
C) covered interest arbitrage is feasible from the perspective of foreign investors and results in a yield above what is possible in their local markets.
D) covered interest arbitrage is feasible for neither domestic nor foreign investors.

Question

Points above the IRP line represent situations where:​
A) ​covered interest arbitrage is feasible from the perspective of domestic investors and results in the same yield as investing domestically.
B) ​covered interest arbitrage is feasible from the perspective of domestic investors and results in a yield above what is possible domestically.
C) ​covered interest arbitrage is feasible from the perspective of foreign investors and results in a yield above what is possible in their local markets.
D) ​covered interest arbitrage is feasible for neither domestic nor foreign investors.

Quizplus · Accepted Answer

The Answer of Points above the IRP line represent situations where:​
A) ​covered interest arbitrage is feasible from the perspective of domestic investors and results in the same yield as investing domestically.
B) ​covered interest arbitrage is feasible from the perspective of domestic investors and results in a yield above what is possible domestically.
C) ​covered interest arbitrage is feasible from the perspective of foreign investors and results in a yield above what is possible in their local markets.
D) ​covered interest arbitrage is feasible for neither domestic nor foreign investors.

Points Above the IRP Line Represent Situations Where:​

Points Above the IRP Line Represent Situations Where: