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Ierofanga [76]
3 years ago
5

f covered interest arbitrage opportunities do not exist, Group of answer choices interest rate parity holds. interest rate parit

y does not hold. interest rate parity holds, and arbitragers will be able to make risk-free profits. arbitragers will be able to make risk-free profits. interest rate parity does not hold, and arbitragers will be able to make risk-free profits.
Business
1 answer:
kodGreya [7K]3 years ago
7 0

Answer: interest rate parity holds

Explanation:

Covered interest arbitrage is a trading strategy that is used by an investor when the person whereby takes advantage of the differences in interest rate between two nations and invest in the currency that brings higher value.

If covered interest arbitrage opportunities do not exist, it simply means that interest rate parity holds.

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