An article in the Wall Street Journal in 2012 noted that interest rates in Australia were higher

Question:

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.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question
Question Posted: