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According to the Interest Parity Condition,if the Domestic Interest Rate

Question 34

Multiple Choice
According to the interest parity condition,if the domestic interest rate is ________ the foreign interest rate,then ________.

According to the interest parity condition,if the domestic interest rate is ________ the foreign interest rate,then ________.


A) above; there is expected appreciation of the foreign currency
B) above; there is expected depreciation of the foreign currency
C) below; there is expected appreciation of the foreign currency
D) below; the interest parity condition is violated

Correct Answer:

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