6 In the previous question, the Australian interest rates increased from 6% to 11%. According to the
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6 In the previous question, the Australian interest rates increased from 6% to 11%. According to the IFE, what is the underlying factor that would cause such a change? Give an explanation based on the IFE of the forces that would cause a change in the Australian dollar. If UK investors believe in the IFE, will they attempt to capitalize on the higher Australian interest rates? Explain.
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