Assume that an item costs $100 in the U.S. and the exchange rate between the U.S. and Canada is: $1 = C$1.27

Assume that an item costs $100 in the U.S. and the exchange rate between the U.S. and Canada is: $1 = C$1.27. Which one of the following concepts supports the idea that the item that sells for $100 in the U.S. is currently selling in Canada for $127?    A.  unbiased forward rates condition B.  uncovered interest rate parity C.  international Fisher effect D.  purchasing power parity E.  interest rate parity Refer to section 21.3

16.

The condition stating that the interest rate differential between two countries is equal to the percentage difference between the forward exchange rate and the spot exchange rate is called:    A.  the unbiased forward rates condition. B.  uncovered interest rate parity. C.  the international Fisher effect. D.  purchasing power parity. E.  interest rate parity. Refer to section 21.4

17.	Which one of the following states that the current forward rate is an unbiased predictor of the future spot exchange rate?    A.  unbiased forward rates B.  uncovered interest rate parity C.  international Fisher effect D.  purchasing power parity E.  interest rate parity Refer to section 21.4

18.

Which one of the following states that the expected percentage change in the exchange rate between two countries is equal to the difference in the countries' interest rates?    A.  unbiased forward rates condition B.  uncovered interest parity C.  international Fisher effect D.  purchasing power parity E.  interest rate parity Refer to section 21.4

19.	Which one of the following supports the idea that real interest rates are equal across countries?    A.  unbiased forward rates condition B.  uncovered interest rate parity C.  international Fisher effect D.  purchasing power parity E.  interest rate parity Refer to section 21.4