What is the peso problem? O Expectations are realized on average, and returns from interest arbitrage...
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What is the "peso problem"? O Expectations are realized on average, and returns from interest arbitrage are zero. O Even when exchange rates are fixed, investors often demand a premium for interest arbitrage, so the return from arbitrage can be positive or negative. O Pegged currencies are less stressful for investors because there is no room for speculation. O Returns from interest arbitrage are always positive, even when the peg breaks. What is the "peso problem"? O Expectations are realized on average, and returns from interest arbitrage are zero. O Even when exchange rates are fixed, investors often demand a premium for interest arbitrage, so the return from arbitrage can be positive or negative. O Pegged currencies are less stressful for investors because there is no room for speculation. O Returns from interest arbitrage are always positive, even when the peg breaks.
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Related Book For
Accounting Volume 2
ISBN: 978-0176509743
2nd Canadian edition
Authors: James Reeve, Jonathan Duchac, Sheila Elworthy, Carl S. Warren
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