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IRPT & Forward Rates

SSureena7y ago
The CIMA text says: IRPT implies that a money market hedge should give roughly the same result as a forward contract, as forward exchange rates are derived from spot rates and money market interest rates. I am a little confused. How does the IRPT forecast of forward rates relate to the forward rates used in forward contract whereby either a discount or premium is added or subtracted from the prevailing spot rate?
kengarrettkengarrettTutor7y ago#1
See page 83 of our notes.
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