Question: Question 2 2 1 pts b ) If interest rate parity holds between two countries then it must be true that the interest rates between

Question 22
1 pts
b) If interest rate parity holds between two countries then it must be true that
the interest rates between the two countries are equal
e. the exchange rate adjusts to keep purchasing power constant between countries
the current forward rate is an unbiased predictor of the future exchange rate
significant interest arbitrage opportunities exist between the two currencies in question
the interest rate differential between countries is approximately the percent difference between the forward and spot exchange rates
Question 2 2 1 pts b ) If interest rate parity

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