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Assume that interest rate in the US is 7%, while that in the UK is 3%. Assume also that the spot and one-month forward exchange
Assume that interest rate in the US is 7%, while that in the UK is 3%. Assume also that the spot and one-month forward exchange rates between the USD and the pound sterling are $1.20 and $1.25.
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To determine whether interest rate parity holds between the UK and the US we need to compare the int...
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International Finance Theory and Policy
Authors: Paul R. Krugman, Maurice Obstfeld, Marc J. Melitz
10th edition
978-0133425895, 133425894, 978-0133423631, 133423638, 978-0133423648
