18. Which of the following parity relations of international finance is:
| most likely to hold in the short run? | least likely to hold in the short run? | A. | Interest rate parity | Relative purchasing power parity | B | Interest rate parity | Absolute purchasing power parity | C | Relative purchasing power parity | Interest rate parity | D | Relative purchasing power parity | Absolute purchasing power parity |
Select exactly 1 answers from the following: A. B. C. D.
答案和详解如下！
Feedback: Correct answer: B
International Investments, 5th edition, Bruno Solnik and Dennis McLeavey (Addison Wesley, 2004), pp. 19, 45?8 2006 Modular Level I, Vol. II, pp. 374, 395-398 Study Session 6-27-g, 6-28-g explain interest rate parity and illustrate covered interest arbitrage; discuss absolute purchasing power parity and relative purchasing power parity
If interest rate parity does not hold, an arbitrage condition will exist; however, absolute purchasing power parity is a theoretical relation requiring determination of an average national price level.
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发表于 2006-11-21 11:38
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