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0/1 pts Incorrect Question 4 Which of the following statement in CORRECT? The interest rate parity is said to be covered when the no-arbitrage condition

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0/1 pts Incorrect Question 4 Which of the following statement in CORRECT? The interest rate parity is said to be covered when the no-arbitrage condition could be satisfied through the use of swap contracts in an attempt to hedge against foreign exchange risk. Forward parity states that any forward premium or discount is equal to the expected change in the exchange rate. The International Fisher Effect (IFE) states that the currency of the country with a lower nominal interest rate is expected to depreciate against the currency of the country with the lower nominal interest rate. Interest Rate Parity (IRP) is best defined as when the central bank of a country brings its domestic interest rate in line with its major trading partners. Parity conditions are equilibrium conditions and hold in both short-term and long-term time periods. 0/1 pts Incorrect Question 3 Which of the following conditions tend to generate profits for carry trades? i. When the funding currency is converted to a currency, which is then invested at a much higher interest rate than the interest rate for borrowing in the funding currency. ii. Buying the investment currency drives up the yields of debts denominated in the investment currency ili. The investment currency appreciates against the funding currency landi i and it No answer text provided. i, ii, and in

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