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Which of the following is not true of the currency exchange pricing mechanism? a) Purchasing power and interest rate parity conditions are always met. b)
Which of the following is not true of the currency exchange pricing mechanism? a) Purchasing power and interest rate parity conditions are always met. b) a fair forward price can be calculated using the spot rate for the two currencies in question and a corporations cost of short term borrowing and short term investment returns. c) The fair value referred to in b is the benchmark for evaluating arbitrage opportunities. d) Forward pricing drives the value of currency derivative instruments.
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