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Question 16: Assume that the one-year interest rates for USD and CHF are: PUSD = 5% and CHF = 2% and that the expected spot

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Question 16: Assume that the one-year interest rates for USD and CHF are: PUSD = 5% and CHF = 2% and that the expected spot rate at t = 1 is E (XCHF/USD = 1.12, and that the current spot rate is XCHF/USD = 1.04; by how many percent is the USD overvalued/undervalued according to the UIRP condition

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