Question
If the interest rate in the U.S. is 4% for the next year and interest rate in the U.K. is 6% for the next year,
If the interest rate in the U.S. is 4% for the next year and interest rate in the U.K. is 6% for the next year, uncovered IRP suggests that
A. the pound is expected to depreciate against the dollar by about 2%.
B. the pound is expected to appreciate against the dollar by about 2%.
C. the dollar is expected to appreciate against the pound by about 2%.
D. Both A and C are correct
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Fundamentals Of Corporate Finance
Authors: Berk, Peter DeMarzo, Jarrad Harford
3rd Global Edition
1292018402, 9781292018409
