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Suppose that the international parity conditions (i.e., CIP, UIP, PPP, RIP, Fisher Effect) all hold and a country has a higher nominal interest rate than
Suppose that the international parity conditions (i.e., CIP, UIP, PPP, RIP, Fisher Effect) all hold and a country has a higher nominal interest rate than the United States. Which of the following is incorrect? O a. The currency with a forward discount is expected to appreciate in relative to the currency with a forward premium Ob. The country with higher nominal interest rate should have a higher expected rate of inflation relative to the US Oc. The currency with higher expected inflation rate should be expected to depreciate relative to USD Od. The currency with higher nominal interest rate should be traded at a forward discount relative to USD
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