What is the theory of interest rate parity

Reference no: EM13926585

1. What is the theory of interest rate parity?

2. What is covered interest arbitrage?

3. Describe two techniques that a company can use to hedge against transaction exchange risk.

4. Describe the factors that cause exchange rates to change over time.

5. What are the advantages to a U.S. firm of financing its foreign investments with funds raised abroad?

6. Describe how the concepts of relative purchasing power parity, interest rate parity, and the international Fisher effect are related.

Reference no: EM13926585

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