When the forward premium or discount on the foreign currency equals the interest differential between the domestic and foreign interest rates divided by one plus the foreign interest rate, what is being satisfied?

A) covered interest arbitrage
B) interest rate parity
C) domestic and foreign interest rates
D) spot and forward exchange rates

Answer: B

Business

You might also like to view...

A "FICO" score is normally used for which of the following:

A: Calculating depreciation on commercial property; B: Establishing underwriting standards for private mortgage insurance; C: Determining which loans qualify for GNMA special assistance; D: Reporting the credit history for a prospective borrower.

Business

An individual attempting to enter retailing who desires and requires considerable training and assistance should consider _____

a. product/trademark franchising b. business format franchising c. independent retailing d. a leased department operation

Business