Which of the following is not a possible explanation for why significant deviations from covered interest parity were observed during the recent global financial crisis?
A) A crisis-induced worsening of existing impediments to financial trade .
B) An inability of cash-poor institutions to be able to engage in covered transactions.
C) A decline in trust among banks that trade bonds internationally.
D) Crisis-induced increases in mobility of an substitutability among internationally traded bonds.

Question

Quizplus · Accepted Answer

The other three choices are all possible explanations for deviations from covered interest parity during the global financial crisis.

Which of the Following Is Not a Possible Explanation for Why