PPT & Interest Rate Parity

This topic has 1 reply, 2 voices, and was last updated 7 years ago by Ken Garrett.

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June 26, 2018 at 10:33 am #460163
riar
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I’m just really confused with examples 10 & 11. You have taken £ as the base rate for both example workings, but in the notes provided, $ is given as the base currency.
It would be really great if you can revert on this, as it confused my understanding of PPT and IRP.
Thank you!
Ria
June 26, 2018 at 4:14 pm #460199
Ken Garrett
Keymaster
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Well, in the exam any currency, even a made up one, could be used as the base, so you have to try to cope. If you want to explain precisely what causes the problem in the examples or where you go wrong, I can try to explain again.
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