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Basic Question 20 of 27
If the covered interest differential between two money markets is nonzero, there is an arbitrage incentive to move money from one market to the other. True or False?
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I used your notes and passed ... highly recommended!
Lauren
Learning Outcome Statements
explain international parity relations (covered and uncovered interest rate parity, forward rate parity, purchasing power parity, and the international Fisher effect);
describe relations among the international parity conditions;
evaluate the use of the current spot rate, the forward rate, purchasing power parity, and uncovered interest parity to forecast future spot exchange rates;
explain approaches to assessing the long-run fair value of an exchange rate;
CFA® 2025 Level II Curriculum, Volume 1, Module 8.