Assume that the current exchange rate between U.K. pound and the U.S. dollar is 2 (E = 2.0). If interest parity holds, and the U.S. interest rate is 6% while the U.K. interest rate is 8%, the expected exchange rate in one year is:
Assume that the current exchange rate between U.K. pound and the U.S. dollar is 2 (E = 2.0). If interest parity holds, and the U.S. interest rate is 6% while the U.K. interest rate is 8%, the expected exchange rate in one year is: