Answer:
The correct answer is Interest rate parity (IRP).
Step-by-step explanation:
The interest rate parity represents an equilibrium statement in which the expected benefit, expressed in national currency, is the same for assets denominated in national currency and assets denominated in foreign currency of similar risk and term, provided that arbitration is not made. . This is because the exchange rate in the currency market between both currencies balances the return on both investments. According to the theory of interest rate parity, several situations can be found that we will see below: interest rate parity discovered and interest rate parity covered.