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Basic Question 2 of 3
The expected reward on a carry trade is:
B. favorable exchange rate movements.
C. inflation differential.
A. the gradual accrual of the interest rate differential that's unrelated to exchange rate volatility.
B. favorable exchange rate movements.
C. inflation differential.
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I was very pleased with your notes and question bank. I especially like the mock exams because it helped to pull everything together.

Martin Rockenfeldt
Learning Outcome Statements
explain how flows in the balance of payment accounts affect currency exchange rates;
CFA® 2026 Level II Curriculum, Volume 1, Module 8.