Which one of the following must be significantly eliminated if interest rate parity is to exist?

Question

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Covered interest arbitrage opportunities must be significantly eliminated for interest rate parity to exist. This is because covered interest arbitrage involves taking advantage of differences in interest rates between two countries by borrowing in one country's currency at a low interest rate and investing in another country's currency at a higher interest rate, while covering exchange rate risk with a forward contract. If covered interest arbitrage opportunities exist, it means that there are discrepancies between the forward exchange rate and the spot exchange rate, which undermines the assumptions of interest rate parity. Eliminating these opportunities is necessary for interest rate parity to hold.

Which One of the Following Must Be Significantly Eliminated If