All things considered, it is unlikely that equality of real interest rates across countries is a good description of reality, especially in the short run. The following options explain the reasons for this EXCEPT:
A) identical nominal returns imply very different real returns for investors in different countries.
B) returns in different currencies can have different currency risk premiums.
C) political risks or the threat of capital controls prevent investors from taking advantage of higher returns in other countries.
D) PPP deviations are not sizable and prolonged.
Answer: D
You might also like to view...
A major disadvantage of markup pricing is that standard markups are not easy to apply
Indicate whether the statement is true or false
Whether an invention belongs to an employee or the employer depends on
a. the agreement between them. b. the nature of the invention. c. the work for which the employee was hired. d. all of these.
A cyberterrorist might target a government agency, but not a business
Indicate whether the statement is true or false
In process costing, a separate work in process account is kept for each:
A. individual order. B. processing department. C. equivalent unit. D. cost category (i.e., materials, conversion cost).