Based on interest rate parity, the larger the degree by which the foreign interest rate exceeds the UK interest rate, the.?

larger will be the forward discount of the foreign currency
larger will be the forward premium of the foreign currency
smaller will be the forward premium of the foreign currency
smaller will be the forward discount of the foreign currency

LohaHridoy

7 views

2025-01-04 04:42

1 Answers

AhmedNazir

Answer: Option 1

Based on interest rate parity, the larger the degree by which the foreign interest rate exceeds the UK interest rate, the larger will be the forward discount of the foreign currency. Interest rate parity (IRP) is a theory in which the interest rate differential between two countries is equal to the differential between the forward exchange rate and the spot exchange rate.

7 views Answered 2022-09-01 13:21

Related Questions

In a step-down transformer, which is larger?

1 Answers 4 Views

For a compression member with double angle section, which of the following section will give larger value of minimum radius of gyration?

1 Answers 4 Views

Two circular discs of same weight and thickness are made from metals having different densities. Which disc will have the larger rotational inertia about its central axis?

1 Answers 4 Views

Two computers that communicate with each other use a simple parity check to detect errors for ASCII transmissions. Which of the following events will always lead to an undeleted error?

1 Answers 4 Views

Input call parity relationship, present value of exercise price is added to call option which is equal to?

1 Answers 4 Views

Authority which intervenes directly or indirectly in foreign exchange markets by altering interest rates is considered as?

1 Answers 4 Views

If price at which stock is purchased exceeds market value then stock warrants will?

1 Answers 5 Views

Theory according to which difference between expected appreciation and foreign interest must be equal to domestic interest rate is called?

1 Answers 4 Views

An investment that gives the investor a controlling interest in a foreign company is known as which of the following?

1 Answers 4 Views

Statement : A large number of students who have passed their XII Std. terminal examination in the country could not get admission to colleges as the number of seats available are grossly inadequate. Courses of Action : I. The evaluation system of XII Std. terminal examination should be made more tough so that fewer students pass the examination. II. The Government should encourage the private sector to open new colleges by providing them land at cheaper rate. III. The rich people should be asked to send their wards to foreign countries for higher studies enabling the needy students to get admission in colleges within the country.?

1 Answers 5 Views

এক্সাম দিয়ে মেধা যাচাই করুন

Job Preparation (1125)

Admission (754)

এসএসসি (10)

এইচএসসি (5)