With covered interest parity, the forward exchange rate O equals the spot exchange rate plus the difference between the home and foreign interest rates is equal to the expected future spot exchange rate always equals the spot exchange rate equals the interest rate differential O must be higher than the spot exchange rate

With covered interest parity, the forward exchange rate O equals the spot exchange rate plus the difference between the home and foreign interest rates is equal to the expected future spot exchange rate always equals the spot exchange rate equals the interest rate differential O must be higher than the spot exchange rate

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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