Does interest rate parity imply that interest rates are the same in all countries?

Category:
0
0

Does interest rate parity imply that interest rates are the same in all countries?

Answer and ExplanationSolution by a verified expert

Explanation

Interest rate parity equalizes the interest rates from country to country. When a difference occurs, the currency with the higher interest rate is expected to depreciate and the currency with the lower interest rate will appreciate. The economic result is that the interest received will end up being the same from country to country.

Verified Answer

Interest rate parity implies that any difference in interest rates between currencies are smoothed out by differences in exchange rates, implying that rates are essentially the same.

Purchase this answer to view it.
Click the button to login/signup and buy full solution at 2 USD only.

Assignment Writers are Online Now!

Need to pay someone to write your paper from scratch? We have experts for all types of assignments.

🎓 Write my Essay
📚 Write my Persuasive Essay
📋 Write my Argumentative Essay
🧑‍💻 Write my Reflective Essay
📑 Write my Research Paper
📜 Write my Thesis Paper
📘 Write my Dissertation
📋 Write my Case Study
📝 Write my Online Exam
✒️ Write my Term Paper
Write my Paper