PART 1 IRP Crossword

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Across
  1. 3. Investors use IRP to decide where to invest internationally by comparing domestic and ____ interest rates. (7 letters)
  2. 5. When interest rates are higher in one country, it should lead to a _____ in its currency value. (12 letters)
  3. 9. A strategy used to exploit the difference between the spot and forward exchange rates due to differing interest rates between two countries. (9 letters)
Down
  1. 1. IRP is a fundamental concept in international finance that explains the relationship between interest rates and _____ rates. (8 letters)
  2. 2. The exchange rate at which one currency can be exchanged for another in the future is called? (7 letters)
  3. 4. When IRP holds, no arbitrage opportunity exists, and the market reaches this state. (11 letters)
  4. 6. What term describes the difference between the forward exchange rate and the spot exchange rate due to interest rate disparities? (7 letters)
  5. 7. In Covered IRP, a contract is used to eliminate _____ risk. (8 letters)
  6. 8. A term describing the potential return on an investment adjusted for risks, is often considered in IRP. (6 letters)
  7. 10. In IRP, the expected change in the exchange rate is related to the difference in _____ rates. (8 letters)