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15. Explain in words why the interest rate parity condition will be satisfied, if investors are risk neutral. Would the interest rate parity condition continue
15. Explain in words why the interest rate parity condition will be satisfied, if investors are "risk neutral". Would the interest rate parity condition continue to hold if investors are "risk averse"? Why or why not? If not, which expected rate of return will be larger when investors are risk averse: the expected rate of return on domestic investment (RDI^e) or the expected rate of return on foreign investment (RFI^e )? Explain.
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