Question
if interest rate parity does not hold and the forward premium exceeds the interest rate differential, foreign financing with a simultaneous forward purchase of the
if interest rate parity does not hold and the forward premium exceeds the interest rate differential, foreign financing with a simultaneous forward purchase of the currency borrowed will result in an effective financing rate that is ___?
Lower than the domestic interest rate
Higher than the domestic interest rate
Similar to the domestic interest rate
Highly variable
None of the above
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Public Finance A Contemporary Application Of Theory To Policy
Authors: David N Hyman
12th Edition
0357442156, 978-0357442159
