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Question of the Week – Economics (parity conditions)

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    • Avatar of shannondailyshannondaily
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        • Undecided
        24 Jan 2018 at 8:32 am
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        Boo! I got it wrong. :neutral_face: 

      • Avatar of exam_whizexam_whiz
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          • Undecided
          06 Oct 2017 at 8:10 pm
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          Statement I is correct, but statement II is incorrect. Hope this helps!

        • Avatar of christinechristine
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            05 Oct 2017 at 7:36 am
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            is an answer incoming…?

            All these questions serve to remind me how much I’ve forgotten… 🙁

          • Avatar of ensenmasonensenmason
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              • CFA Level 2
              06 Oct 2017 at 3:30 pm
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              If statements I & II are correct, wouldn’t it be B?

            • Avatar of exam_whizexam_whiz
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                • Undecided
                05 Oct 2017 at 11:55 am
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                There certainly is a lot of material on the exam to remember!

                Correct Answer: A

                Purchasing power parity refers to the relation between differences in countries’ inflation rates and changes in exchange rates of their currencies. Interest rate parity refers to the relation between differences in interest rates for two currencies and changes in their exchange rates. Thus, both statements II and III are incorrect.

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