Question 2 0 / 1 point Arbi-loan are : O Loan procured from lowest interest country O Loan procured from lowest interest country hedged against exchange rate risk Loan procured from country whose effective - rather than nominal - interest rate is lowest ONone of the above Question 3 0 / 1 point Interest rate parity between two countries means that O Nominal interest rates in those two countries are equal Real interest rates in those two counties are equal O Nominal interest rates adjusted for the cost of hedging against exchange risk are equal O The "no-profit" forward rate is different from the market forward rate O All of the aboveQuestion 4 0 / 1 point Which of the following is a risk factor in covered interest rate arbitrage O Interest rate risk The forward rate may not equal the future spot exchange rate O Counter-party risk O Inflation risk None of the above Question 6 0 / 1 point Assuming that the spot exchange rate is US$ 1.10 = AUD1 and that quarterly interest rates are 1.25% in the US and 2.25% in Australia whereas the AUD is at a 1% quarterly discount, interest rate parity means that: the 90 day forward exchange rate is US$1.10 = AUD 1 the 90 day forward rate is US$ 1.08 = AUD1 O the 90 day forward rate is US$ 1.12 = AUD1 Onone of the aboveQuestion 7 0 / 1 point Assuming that quarterly interest rates are 1.25% in the US and 2.25% in Australia whereas the AUD is at a 1% quarterly discount, interest rate parity means that: Short-term capital will flow from the US to Australia Short term capital will flow from Australia to the US The no-profit forward rate is equal to the market forward rate O a and c Ob and c