13. Based on interest rate parity (IRPT), the smaller the degree by which the U.S. interest rate exceeds the foreign interest rate, the:

a.	larger will be the forward discount of the foreign currency.
b.	larger will be the forward premium of the foreign currency.
c.	smaller will be the forward premium of the foreign currency.
d.	smaller will be the forward discount of the foreign currency.
e.	No Answer

14. Given a home country and a foreign country, purchasing power parity (PPP) suggests that:

a.	a home currency will depreciate if the current home inflation rate exceeds the current foreign interest rate.
b.	a home currency will appreciate if the current home interest rate exceeds the current foreign interest rate.
c.	a home currency will appreciate if the current home inflation rate exceeds the current foreign inflation rate.
d.	a home currency will remain unchanged if the current home inflation rate equal the current foreign inflation rate.
e.	No Answer

15. The international Fisher effect (IFE) suggests that:

a.	a home currency will depreciate if the current home interest rate exceeds the current foreign interest rate.
b.	a home currency will appreciate if the current home interest rate exceeds the current foreign interest rate.
c.	a home currency will appreciate if the current home inflation rate exceeds the current foreign inflation rate.
d.	a home currency will depreciate if the current home inflation rate exceeds the current foreign inflation rate.
e.	No Answer.