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Define uncovered interest parity. What is the relationship among the forward exchange rate, the spot exchange rate, and
Posted: Fri Jul 01, 2022 7:56 am
by answerhappygod
- Define Uncovered Interest Parity What Is The Relationship Among The Forward Exchange Rate The Spot Exchange Rate And 1 (8.58 KiB) Viewed 21 times
Define uncovered interest parity. What is the relationship among the forward exchange rate, the spot exchange rate, and the interest rate? Suppose the (1-year) interest rate on bank deposits is 2% in Canada and 1.5% in United States. If the (1-year) forward US$-C$ exchange rate is C$1.5 per US$ and the spot rate is C$1.2 per US$, what is the expected US$-C$ exchange rate one year ahead? (15 marks)