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Basic Question 1 of 6

A high-yield currency's real value has a positive correlation with:

A. nominal yield spread: (iH - iL).
B. expected inflation differential: ().
C. risk premium differential: ().

User Contributed Comments 2

User Comment
tsp2017a if the high-yield currency's real value goes up, why would the nominal yield-spread also go up? not sure if this answer is correct.
Yarrstar Nominal yield is independent variable
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Learning Outcome Statements

explain how flows in the balance of payment accounts affect currency exchange rates;

CFA® 2024 Level II Curriculum, Volume 1, Module 8.