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Suppose a deposit in New York earns 6 percent a year and a deposit in London earns 4 percent a year. Interest rate parity holds if the

Correct Answer: U.S. dollar depreciates by 2 percent a year.

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International Financial Management MCQ: Suppose a deposit in New York earns 6 percent a year and a deposit in London earns 4 percent a year. Interest rate parity holds if the | Extra Education