Question: Assume that the U . S . interest rate is 1 0 pereent, while the British interest rate is 1 5 percent. If interest rate
Assume that the US interest rate is pereent, while the British interest rate is percent. If interest rate parity exists, then:
British iavestors who invest in the Uniled Kiapdogn will achieve the same refurn as US investors who invest in the United States.
US investors will carn a higher rate of return when enieg covered interest arbitrage than what they would earn in the United States.
US investors will carn percent whether they ase cevered interest arbitrage or invest is the United States.
US investors will cars percent whether they wie covered interest abitrage of invest in the United States.
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