• 2022-06-26
    What would the foreign interest rate need to be to achieve interest rate parity if the domestic interest rate is 5%, the forward rate is 1.48 and the spot rate is 1.5?
    A: 6%
    B: 8%
    C: 7%
    D: 2%
  • A

    内容

    • 0

      According to the theory of interest rate parity, if a country raises interest rate, it will cause the local currency to discount in the forward market.

    • 1

      7. If the expected future spot exchange rate value of the foreign currency decreases, with the interest rate differential unchanged, the current spot exchange rate value of the domestic currency:

    • 2

      The relationship among real interest rate, nominal interest rate, and expected inflation rate is _________. A: real interest rate = nominal interest rate+ expected inflation rate B: real interest rate = nominal interest rate- expected inflation rate C: real interest rate = expected inflation rate - nominal interest rate D: nominal interest rate = real interest rate - expected inflation rate

    • 3

      中国大学MOOC: Assume that the interest rate in the home country of Currency X is much higher than the U.S. interest rate. According to interest rate parity, the forward rate of Currency X:

    • 4

      Covered interest arbitrage is plausible when the forward premium reflect the interest rate differential between two countries specified by the interest rate parity formula.