Which of the following theories suggests that the percentage change in spot exchange rate of a currency should be equal to the inflation differential between two countries?
A) purchasing power parity (PPP) .
B) triangular arbitrage.
C) international Fisher effect (IFE) .
D) interest rate parity (IRP) .
Correct Answer:
Verified
Q30: Which of the following is indicated by
Q31: The interest rate in the U.K. is
Q32: The IFE theory suggests that foreign currencies
Q33: If interest rate parity holds, then the
Q34: If interest rate parity holds, and the
Q36: Which of the following theories suggests that
Q37: The inflation rate in the U.S. is
Q38: The relative form of purchasing power parity
Q39: If the IFE theory holds, that means
Q40: Assume that the inflation rate in Singapore
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents