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Which of the following statement(s) is/are false? I. The International Fisher Effect suggests that the nominal interest rate differential reflects the expected change in the

Which of the following statement(s) is/are false?

I. The International Fisher Effect suggests that the nominal interest rate differential reflects the expected change in the exchange rate.

II. Generally unfavorable evidence on IRP suggests that substantial barriers to arbitrage exist.

III. The IRP holds all the time.

I only

II only

III only

I and II only

None of the above choices

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