Suppose the interest parity condition holds. Also assume that the one- year interest rate in Australia (home country) is 5.5% and that the one- year interest rate in Canada (foreign country) is 5.5%. What does this imply about the current versus future expected exchange rate (for the Australian and Canadian dollars)? Explain.

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The Answer of Suppose the interest parity condition holds. Also assume that the one- year interest rate in Australia (home country) is 5.5% and that the one- year interest rate in Canada (foreign country) is 5.5%. What does this imply about the current versus future expected exchange rate (for the Australian and Canadian dollars)? Explain.

Suppose the Interest Parity Condition Holds