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Assume interest rates in the US are at 1.5% per year, and interest rates in Israel are at 6% per year, and that the shekel
Assume interest rates in the US are at 1.5% per year, and interest rates in Israel are at 6% per year, and that the shekel is trading at 4 shekels/dollar. If the 2 year forward rate is 4.3 shekels/dollar, do you want to invest in dollars or shekels to maximize your returns for the nest 2 years? Why?
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