If interest rate parity is in effect, there are ________
A) no profitable opportunities for covered interest arbitrage
B) many opportunities for covered interest arbitrage
C) currency dealers will arbitrage interest rate differentials in different countries
D) currency dealers will be motivated to arbitrage forward market contracts
Answer: A
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Errors and irregularities are defined as intentional distortions of facts. Errors Irregularities
A. Yes Yes B. Yes No C. No Yes D. No No
One of the rebuttals to Samuelson's critique of the free trade model is that:
A. the United States' ability to achieve constant returns to specialization is unparalleled. B. the strict immigration policies of the United States help insulate the economy from inward migration. C. introducing trade barriers may in fact be beneficial to developed nations to some extent. D. developing nations are unlikely to upgrade the skill level of their workforce rapidly enough. E. the developing nations are unlikely to run into diminishing returns in a near future.