All things considered,it is unlikely that equality of real interest rates across countries is a good description of reality,especially in the short run.The following options explain the reasons for this EXCEPT:
A) identical nominal returns imply very different real returns for investors in different countries.
B) returns in different currencies can have different currency risk premiums.
C) political risks or the threat of capital controls prevent investors from taking advantage of higher returns in other countries.
D) PPP deviations are not sizable and prolonged.
Correct Answer:
Verified
Q10: If a country has a capital account
Q11: Which of the following forecasting techniques is
Q12: A summary statistical measure frequently used when
Q13: The covered interest rate parity,uncovered interest rate
Q14: _ techniques are typically based on formal
Q16: Two of the most often used determinants
Q17: The Fisher Effect decomposes nominal interest rates
Q18: Which of the following options is NOT
Q19: If a country has a capital account
Q20: The decomposition of the nominal interest rate
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