1. If parity did not hold and all parameters are fixed between t and t+1, would you prefer to invest $100_nz in New Zealand bonds or US bonds, if i=0.05 , i*=0.1 , E=0.64 and Et+1e=0.68 . Show your calculations.
2. If parity did not hold and all parameters are fixed between t and t+1, would you prefer to invest $100_nz in New Zealand bonds or US bonds, if i=0.05 , i*=0.1 , E=0.64 and Et+1e=0.68 . Show your calculations.