When uncovered interest parity holds, it means that:
举一反三
- Covered interest arbitrage is plausible when the forward premium reflect the interest rate differential between two countries specified by the interest rate parity formula.
- According to the interest rate parity theory, when the forward foreign exchange rate is premium, it means that the domestic interest rate( ) A: is equal to the foreign exchange rate B: lower than foreign exchange rates C: higher than foreign exchange rates D: Not sure
- The __________ differential is approximately equal to the forward premium on a currency plus the interest rate differential. A: covered interest B: uncovered interest C: covered currency D: uncovered currency
- Which of the theories explaining the yield curve can explain the slope of the yield curve but cannot explain why it is traditionally upward sloping? A: the Segmented Markets theory B: the Expectations theory C: the Preferred Habitat theory D: Uncovered Interest Rate parity
- According to the interest rate parity theory, the forward currency of countries with a lower interest rate will appreciate.