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. Interest rate parity asserts that the difference in interest rates between two countries should be equal to the difference in their exchange rates. Covered interest arbitrage allows for investors to take advantage of differences in interest rates without taking on exchange rate risk, which would violate interest rate parity. Therefore, covered interest arbitrage must be eliminated for interest rate parity to hold true.

Which One of the Following Must Be Significantly Eliminated If