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Suppose that investors who determine the Spanish German exchange rates only care about the value-of-risk of their holdings of Spanish assets, how would this affect
Suppose that investors who determine the Spanish German exchange rates only care about the value-of-risk of their holdings of Spanish assets, how would this affect the equation which determines interest rate parity? How might this affect the consequences of monetary policy? [Hint: define Value-At-Risk and explain how this comes into play].
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