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a . Show that there is a direct relationship between the forward premium and the real interest rate differential between two currencies. b . Under
a Show that there is a direct relationship between the forward premium
and the real interest rate differential between two currencies.
b Under what conditions will the forward premium equal the
expected inflation differential between two currencies?
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Money Banking And Financial Markets
Authors: Stephen Cecchetti, Kermit Schoenholtz
3rd Edition
007337590X, 9780073375908
