This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: What is uncovered interest parity? Explain. What will be an ideal ... (Read 55 times)

mp14

  • Hero Member
  • *****
  • Posts: 534
on: Jun 30, 2018
What is uncovered interest parity? Explain.
 
  What will be an ideal response?

Question 2

For this question, assume that the Phillips curve equation is represented by the following: t - t-1 = (m + z) - ut. Which of the following will cause a reduction in the natural rate of unemployment?
 
  A) an increase in m
  B) an increase in z
  C) an increase in
  D) an increase in actual inflation
  E) an increase in expected inflation


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

Liddy

  • Sr. Member
  • ****
  • Posts: 342
Reply #1 on: Jun 30, 2018
Answer to Question 1

Uncovered interest parity or interest parity, is an arbitrage condition stating that the expected rates of return in terms of domestic currency on domestic bonds and foreign bonds must be equal. Interest parity implies that the domestic interest rate approximately equals the foreign interest rate minus the expected appreciation rate of the domestic currency.

Answer to Question 2

C


mp14

  • Hero Member
  • *****
  • Posts: 534
Reply #2 on: Jun 30, 2018
Thank you :)


Liddy

  • Sr. Member
  • ****
  • Posts: 342
Reply #3 on: Jun 30, 2018
Happy to help you


« previous next »
 

Did you know?

Cyanide works by making the human body unable to use oxygen.

Did you know?

Although the Roman numeral for the number 4 has always been taught to have been "IV," according to historians, the ancient Romans probably used "IIII" most of the time. This is partially backed up by the fact that early grandfather clocks displayed IIII for the number 4 instead of IV. Early clockmakers apparently thought that the IIII balanced out the VIII (used for the number 8) on the clock face and that it just looked better.

Did you know?

For high blood pressure (hypertension), a new class of drug, called a vasopeptidase blocker (inhibitor), has been developed. It decreases blood pressure by simultaneously dilating the peripheral arteries and increasing the body's loss of salt.

Did you know?

The use of salicylates dates back 2,500 years to Hippocrates’s recommendation of willow bark (from which a salicylate is derived) as an aid to the pains of childbirth. However, overdosage of salicylates can harm body fluids, electrolytes, the CNS, the GI tract, the ears, the lungs, the blood, the liver, and the kidneys and cause coma or death.

Did you know?

The newest statin drug, rosuvastatin, has been called a superstatin because it appears to reduce LDL cholesterol to a greater degree than the other approved statin drugs.

Draw and label a diagram and explain how a factor-dependent transcription (rho-dependent) terminator Draw and label a diagram and explain how a factor-dependent transcription (rho-dependent) terminator
How to calculate simple interest (Part 2) How to calculate simple interest (Part 2)
How to calculate simple interest (Part 4; P = I/rt) How to calculate simple interest (Part 4; P = I/rt)
How to calculate compound interest (Part 2) How to calculate compound interest (Part 2)
Nine $10 000, 4% bonds with interest payable semi-annually and redeemable at par are purchased ... Nine $10 000, 4% bonds with interest payable semi-annually and redeemable at par are purchased ...
A non-interest-bearing five-year note for $54600.00 issued May 1, 2015, is discounted April 1, ... A non-interest-bearing five-year note for $54600.00 issued May 1, 2015, is discounted April 1, ...
Video: Properties of water -structure of water and polarity (Ionized and polar compounds)

For a complete list of videos, visit our video library