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In 2008, the exchange rate between the US dollar and New Zealand dollar was NZ$1.71/$; in 2009, the exchange rate between the US dollar and
In 2008, the exchange rate between the US dollar and New Zealand dollar was NZ$1.71/$; in
2009, the exchange rate between the US dollar and New Zealand dollar was NZ$1.37/$. Suppose
the one year interest rate in New Zealand was 9.1%, and the rate in US was 4.2%. Can you
conduct a currency carry trade with positive profit? How?
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