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Suppose it is possible to execute covered interest arbitrage across the US and Euro zone...

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Accounting

Suppose it is possible to execute covered interest arbitrage across the US and Euro zone markets because the covered rate of return from the US point of view is lower than the US rate of interest. Which of the following should result for Interest Rate Parity to be restored

a.Downward pressure on the Euro zone interest rate. b.Upward pressure on the U.S. interest rate.

c..Downward pressure on the EUR spot rate.

d.Downward pressure on the EUR forward rate.

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