Uncovered interest parity refers to:
a. borrowing in the low-interest currency and lending in the high-interest currency without covering against a change in the exchange rates.
b. foolish actions that usually are not successful.
c. activities that are designed to raise or lower interest rates but are risky.
d. the practice of depositing all of one's funds in one currency without regarding the pros and cons of such a transaction.
Ans: a. borrowing in the low-interest currency and lending in the high-interest currency without covering against a change in the exchange rates.
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