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Suppose that the British (currency: Pound) inflation rate is 4.7% while that in the U.S. is 3.8%. If Britain currently issues 1-year bonds with an
Suppose that the British (currency: Pound) inflation rate is 4.7% while that in the U.S. is 3.8%. If Britain currently issues 1-year bonds with an interest rate of 5.7%, and if all of the parity conditions from class hold, what should be the interest rate on a 1-year U.S. bond
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