If the basic relationships in Section 22 1 hold, then what will be the relationship between the expected change in the Ruritanian dollar exchange rate and the interest rates in the United States and Ruritania Suppose that you were confident that the exchange rate would not change over the coming ye...

Currently the dollar buys 105 Ruritanian pesos 12 months forward If the basic ...

If the basic relationships in Section 22.1 hold, then what will be the relationship between the expected

Question:

If the basic relationships in Section 22.1 hold, then what will be the relationship between the expected change in the Ruritanian/dollar and the interest rates in the United States and Ruritania? Suppose that you were confident that the would not change over the coming year. Does this open up a profit opportunity?
Exchange Rate
The value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars...