Question $9$

$1$ pts

Interest rate parity implies that $....$ Select one $-$ the most appropriate answer to fill in the space above.

Investing in all currencies yields the same rate of return, bringing the foreign exchange market to equilibrium.

Nominal and real interest rates should be equal in different countries, bringing foreign exchange and the money market to equilibrium.

Deposits in different countries imply equal rates of return as measured in domestic currencies.

Forward and spot exchange rates must be in equilibrium so that to make real interest rates inelast on money supply.

Real interest rates must be adjusted given expected price levels in different countries.

No correct answer.