The nominal interest rate parity condition states that
A) domestic and foreign assets must have nominal returns that are identical, irrespective of the characteristics of the assets.
B) when domestic and foreign assets have identical risk, liquidity, and information characteristics, their nominal returns must also be identical.
C) while nominal returns are equalized across all foreign and domestic assets, real returns may vary widely.
D) while real returns are equalized across all foreign and domestic assets, nominal returns may vary widely.
B
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Sammy has a drone that he values at $1,500. Frank values the same drone at $1,000. The government offers a subsidy of $800 to the buyers of drones, and Sammy and Frank agree on a price of $1,600. The subsidy creates a deadweight loss of
A) $0 B) $200 C) $500. D) $800.
Refer to the scenario above. What is the probability of winning?
A) 16.66% B) 33.33% C) 45.55% D) 66.66%