Which one of these statements is correct?
A) Relative purchasing power parity says that the expected spot rate 1 year from now is equal to the current spot rate multiplied by (1 + U.S.inflation rate - Foreign inflation rate) .
B) The interest rate parity formula is based on real rates of interest.
C) An indirect quote is the number of dollars required to purchase one unit of a foreign currency.
D) Uncovered interest parity is a combination of the unbiased forward rate and interest rate parity.
E) If the euro per dollar is more expensive in the forward market than in the spot market,the euro is selling at a discount.
Correct Answer:
Verified
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Q25: Relative purchasing power parity states that exchange
Q26: Which one of the following conditions does
Q27: Interest rate parity
A)eliminates exchange rate fluctuations.
B)exists when
Q29: The forward rate market is dependent upon
A)current
Q30: The changes in the relative economic conditions
Q31: The theory that real interest rates are
Q32: According to the unbiased forward rate theory,the
Q33: Assume you borrow $5,000 today,exchange the $5,000
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