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[Assuming there are no transaction costs, markets have perfect capital mobility and investors are risk-neutral] {{ Suppose that the US has upward sloping yield curve

[Assuming there are no transaction costs, markets have perfect capital mobility and investors are risk-neutral] {{ Suppose that the US has upward sloping yield curve and UK has a downward sloping one. Using that information only, what can you tell about the expected change in dollar-pound exchange rate E/$? }} [Yield curve = term structure of interest rate]

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