Interest Rate Parity (IRP)is best defined as:

Question

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Interest Rate Parity (IRP) is a zero arbitrage condition that must hold when international financial markets are in equilibrium. It states that the difference between the interest rates in two countries should be equal to the expected exchange rate adjustment between the two currencies. IRP is a fundamental concept in international finance and has important implications for exchange rate determination and hedging strategies. Options A and B do not accurately define IRP.

Interest Rate Parity (IRP)is Best Defined As