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A situation in the market exhibits Uncovered Interest Rate Parity when... Group of answer choices all traders share the same expectations, and traders act as
A situation in the market exhibits Uncovered Interest Rate Parity when... Group of answer choices all traders share the same expectations, and traders act as homogeneous group, and consequently then Forward Rate and the expectations Et+1 will tend to equalize all traders share the same expectations, and traders split in groups with different trading strategies. As a consequence, the Forward Rate and the expectations Et+1 might not equalize all traders share the same expectations, and the volatility of exchange rates is limited all traders share the same expectations, and the volatility of exchange rates is high
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