Which of the following statements is implied by interest rate parity theory? A product bought in one country should have the same price in other countries, adjusted for exchange rate. Interest rates in all countries with the same political risk should be the same. If two countries have the same inflation rate, they should have the same interest rate, too. An investment in one's home country should have the same return as a similar investment in a foreign country.
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This implies that an investment in one's home country should have the same return as a similar investment in a foreign country. Show more…
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