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If the Difference Between Forward and Spot Exchange Rates Is

Question 31

Multiple Choice

If the difference between forward and spot exchange rates is positive, interest rate parity would predict that:


A) the difference in interest rates between countries will be negative.
B) the difference in interest rates between countries will be positive.
C) there will be no difference in interest rates between countries.
D) any difference in interest rates between countries will be quickly eliminated.

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