Using a graph as in Exhibit 9.3, i.e. ef as the horizontal axis and ih – if as the vertical axis, go to tradingeconomics.

com/currencies and tradingeconomics.com/bonds and click on ‘USDINR’ exchange rate and calculate the oneyear percentage change. Then click on ‘India’ in the bond link to get a more detailed listing and select the 52W bond yield and the same for the US. Then plot ef on the vertical axis and iUS – iIndia on the horizontal axis. Do the same for South Africa for two years (note the annual change in the square root of the two-year change) and any other country of interest. On the graph see whether the devaluation in the currency against the dollar is matched

(offset) by the higher interest rate. In each case determine whether investment in those countries would have benefited a US investor.