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Assume that the interest rate on a one-year treasury bill is 3% and that of a one year Eurobond is 1.5%. Also assume that CIP

Assume that the interest rate on a one-year treasury bill is 3% and that of a one year Eurobond is 1.5%. Also assume that CIP holds in the Forex. If the spot exchange rate is $1.0832 and the forward exchange rate is 1.1075 where will investors invest their money? Also compute the covered interest differential.

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