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Provide the equation that exhibits the state of equilibrium between the money market and the foreign exchange market in these two countries. Explain why this
Provide the equation that exhibits the state of equilibrium between the money market and the foreign exchange market in these two countries. Explain why this equation represents the Interest Rate Parity theorem ? How you can persuade your CEO that the Interest Rate Parity theorem is a reliable tool in forecasting the Dollar/Euro parity at the maturity date. Please provide some reasoning on how multinational corporations can use this theorem to mitigate the currency risk in their foreign business activities
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