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Suppose you were to forecast the GBP/USD exchange rate for a given period and UIRP holds. Which of the following inputs is best for this
Suppose you were to forecast the GBP/USD exchange rate for a given period and UIRP holds. Which of the following inputs is best for this purpose? I. Nominal interest rates in both the UK and the US. II. Aggregate Price Levels in the UK and the US. III. Nominal EuroSterling and Nominal EuroDollar interest rates. IV. Real Exchange Rate. V. Real interest rates in both the UK and the US. Question 26Answer a. I and II b. V and IV c. II and III d. I and IV e. Some other combination of inputs
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