Borrowing in one currency at a low interest rate and lending in another currency at a higher interest rate while protecting against adverse changes in currency exchange rates with forward contracts is known as:
A) currency swaps.
B) carry trade.
C) cover interest arbitrage.
D) interest swaps.
Correct Answer:
Verified
Q1: If the interest rates in a country
Q3: _ is based on the concept that
Q4: Purchasing Power Parity is most useful in
Q5: When a foreign interest rate is higher
Q6: Currencies trade in pairs which means that:
A)an
Q7: For MNCs,the discrepancies in the price of
Q8: In the context of covered interest arbitrage,the
Q9: _ say(s)that exchange rates should equalize prices
Q10: The majority of cover interest arbitrage transactions
Q11: Currency-related parity conditions arise from:
A)international currency markets.
B)cross-border
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