An article in the Wall Street Journal in 2012 noted that interest rates in Australia were higher
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An article in the Wall Street Journal in 2012 noted that interest rates in Australia were higher than in the United States on comparable bonds. The article quoted a specialist on foreign exchange at a bank as predicting the “Australian dollar will tumble” in value relative to the U.S. dollar.
Explain the specialist’s argument in terms of the interest-rate parity condition.
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Related Book For
Money Banking And The Financial System International Edition
ISBN: 978-1292000183
2nd Edition
Authors: R. Glenn Hubbard ,Anthony P Obrien
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