Question
Uncovered Interest Parity and FX Market Exchange rate is defined as US dollars per Euro, E $/ . Given the information below, using UIP (in
- Uncovered Interest Parity and FX Market
Exchange rate is defined as US dollars per Euro, E$/. Given the information below, using UIP (in approximate form), fill in the blanks that you have information for. Round your answers to 3 decimals.
Interest Rate on Dollar Deposit (annual) | Interest Rate on Euro Deposit (annual) | Spot Exchange Rate, E$/(today) | Expected Future Exchange Rate, Ee$/ (in one year) | Expected Rate of Change in Exchange Rate (Ee$/-E$/)/E$/ | Expected Dollar Return on Euro Deposit (annual) | Investors Prefer | |
0.015 (1.5%) | 0.003(0.3%) | 1.10 | 1.756 |
|
|
| |
0.015 | 0.003 (0.3%) |
| 1.756 |
|
|
| |
0.015 | 0.003 |
| 1.756 |
|
| Indifferent | |
0.015 | 0.003 |
| 1.756 |
|
|
|
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