Question: 1. Consider two countries, A and B, whose currencies are a and B, respectively. The inter est rate in A is greater than the interest

1. Consider two countries, A and B, whose currencies are a and B, respectively. The inter est rate in A is greater than the interest rate in B. Which of the following is true accord

1. Consider two countries, A and B, whose currencies are a and B, respectively. The inter est rate in A is greater than the interest rate in B. Which of the following is true accord ing to the expected exchange rate movement relationship and interest rate parity respectively? a is expected to appreciate relative to B, and a trades with a forward discount b. a is expected to appreciate relative to B, and a trades with a forward premium. C. a is expected to depreciate relative to B, and a trades with a forward discount d. a is expected to depreciate relative to B, and a trades with a forward premium

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