Is the interest parity relationship based on current-account

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Reference no: EM133952041

Answer the following questions:

Q1. Is the Interest Parity relationship (IP) based on the Current-Account or Financial (capital) Account? Answer in ONE line.

Q2. Theoretically, does IP hold when international capital is not perfectly mobile? Why yes or no? Answer in brief . No equation is required.

Reference no: EM133952041

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