As the expected future spot rate moves closer to the spot, Ask an Expert

Economics

As the expected future spot rate moves closer to the spot rate, uncovered interest parity indicates that:

A. interest rates should remain constant
b. interest rates should converge.
c. interest rates should diverge.
d. answer depends on whether the expected future spot rate is higher or lower than the spot rate.

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Microeconomics, Economics

Category:- Microeconomics
Reference No.:- M939516

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