One form of the interest rate parity equation appears as 1 + r USt = (1/S t
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One form of the interest rate parity equation appears as 1 + rUSt = (1/St) × (1 + rUKt) × Ft where both the spot and forward rates are expressed in terms of dollars for pounds or direct exchange rates. How would the equation be written if the exchange rates were indirect—that is, pounds for dollars?
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Related Book For
Financial Markets And Institutions
ISBN: 9781264098729
8th Edition
Authors: Anthony Saunders, Marcia Cornett
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