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The use of IRPT in estimating future exchange rate
14y ago
14y ago#1I cannot believe that the examiner will give the two interest rates and expect you to use interest rate parity to forecast an exchange rate.
However if he did, then you would forecast two exchange rates (the buy rate and the sell rate).
To do so you use the US borrowing rate and the UK deposit rate for one, and then the US deposit rate and the UK borrowing rate for the other.
Regards John
However if he did, then you would forecast two exchange rates (the buy rate and the sell rate).
To do so you use the US borrowing rate and the UK deposit rate for one, and then the US deposit rate and the UK borrowing rate for the other.
Regards John