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Doctors Medicines MCQs Q&A

  1. interest rate parity theorem
  2. appreciation parity theorem
  3. domestic parity theorem
  4. foreign interest parity theorem
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1 Answers

Answer: Option 1

Theory according to which difference between expected appreciation and foreign interest must be equal to domestic interest rate is interest rate parity theoremcalled. 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.

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