Which of the following might discourage covered interest arbitrage even if interest rate parity does not exist? A. transaction costs. B. political risk. C. differential tax laws. D. all of the above. E. none of the above.

Which of the following might discourage covered interest arbitrage even if interest rate parity does not exist? A. transaction costs. B. political risk. C. differential tax laws. D. all of the above. E. none of the above.

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter11: Investor Losses

Section: Chapter Questions

Problem 26DQ

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Question

Which of the following might discourage covered interest arbitrage even if interest rate parity does not exist?

A. transaction costs.

B. political risk.

C. differential tax laws.

D. all of the above.

E. none of the above.

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