If the domestic interest rate increases, while the foreign interest rate and the expected spot exchange rate remain constant, the return comparison shifts in favor of investments in bonds denominated in the foreign currency.
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Expectations are destabilizing if they are based on the belief that exchange rates eventually return to the values consistent with basic economic conditions.
A. 对
B. 错
Purchasing power parity theory is a better guide to short-run movements in exchange rates than to long-run movements in exchange rates.
A. 对
B. 错
The law of one price works well for heavily traded commodities, either at a point in time or for changes over time.
A. 对
B. 错
The law of one price does not hold closely for most products that are traded internationally, including nearly all manufactured products.
A. 对
B. 错