The interest rate parity approximation formula is:
A) Ft = S₀[1 + (RFC + RUS) ]ᵗ.
B) Ft = S₀[1 − (RFC − RUS) ]ᵗ.
C) Ft = S₀[1 + (RFC - RUS) ]ᵗ.
D) Ft = S₀[1 + RFC(RUS) ]ᵗ.
E) Ft = S₀(1 − RFC/RUS) ᵗ.
Correct Answer:
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