Interest rate parity explains why __ and ___ exchange rates differ resulting from different interest rates in the two countries.

Question

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Interest rate parity states that the difference in interest rates between two countries should equal the difference between the spot and forward exchange rates. Therefore, spot and forward exchange rates differ due to differences in interest rates. Futures and options are not necessarily affected by interest rates, and spot and future spot are not separate types of exchange rates.

Interest Rate Parity Explains Why __ and ___ Exchange Rates

Interest Rate Parity Explains Why and _ Exchange Rates