Question: 2. (10 pts) Carefully and accurately, derive the expression for uncovered interest rate parity {UlP}. Interpret this expression. Does UIFI hold in the short run?

2. (10 pts) Carefully and accurately, derive the expression for uncovered interest rate parity {UlP}. Interpret this expression. Does UIFI hold in the short run? Why or why not? Does UIP hold in the long run? Why or why not

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