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The book mentions two conditions that are necessary and sufficient to ensure that default-free interest rates of all maturities will always coincide across two currencies.
The book mentions two conditions that are necessary and sufficient to ensure that default-free interest rates of all maturities will always coincide across two currencies. Which one of these is not one of those conditions?
There must be a credibly fixed exchange rate between the two currencies
.
There must be formal rate setting meetings involving both regulatory bodies.
There must be perfect capital mobility between the two markets.
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