CFA Practice Question

There are 253 practice questions for this study session.

CFA Practice Question

Why doesn't uncovered interest rate parity hold in the short term?
A. There is no combination of trades that will lock in a certain profit.
B. It is contrary to covered interest rate parity.
C. Forward exchange rates are unbiased predictors of future spot exchange rates.
Explanation: There is no riskless arbitrage condition that forces uncovered interest rate parity to hold.

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