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Does the Interest Rate Parity Hold in Each of the Following

Question 131

Essay

Does the interest rate parity hold in each of the following cases by using the formula
Rt - Rt

Does the interest rate parity hold in each of the following cases by using the formula R<sub>t</sub> - R<sub>t</sub> <sub> </sub> = (E<sub>e+1 - </sub>E<sub>t</sub>)/E<sub>t</sub> <sub> </sub> ? In case it does not hold,calculate the risk premium. 1.R<sub>t</sub> = 5, = 3,E<sub>t</sub> = 5, = 17 2.R<sub>t</sub> = 6, = 4,E<sub>t</sub> = 5, = 5 3.R<sub>t</sub> = 7, = 5,E<sub>t</sub> = 5, = 8 4.R<sub>t</sub> = 8, = 3,E<sub>t</sub> = 5, = 15 5.R<sub>t</sub> = 5, = 4,E<sub>t</sub> = 6, = 6 6.R<sub>t</sub> = 5, = 5,E<sub>t</sub> = 3, = 10 7.R<sub>t</sub> = 5, = 6,E<sub>t</sub> = 2, = 8 8.R<sub>t</sub> = 5, = 3,E<sub>t</sub> = 0, = 20 9.R<sub>t</sub> = 5, = 9,E<sub>t</sub> = 7, = 3 10.R<sub>t</sub> = 5, = 10,E<sub>t</sub> = 8, = 7 = (Ee+1 - Et)/Et

Does the interest rate parity hold in each of the following cases by using the formula R<sub>t</sub> - R<sub>t</sub> <sub> </sub> = (E<sub>e+1 - </sub>E<sub>t</sub>)/E<sub>t</sub> <sub> </sub> ? In case it does not hold,calculate the risk premium. 1.R<sub>t</sub> = 5, = 3,E<sub>t</sub> = 5, = 17 2.R<sub>t</sub> = 6, = 4,E<sub>t</sub> = 5, = 5 3.R<sub>t</sub> = 7, = 5,E<sub>t</sub> = 5, = 8 4.R<sub>t</sub> = 8, = 3,E<sub>t</sub> = 5, = 15 5.R<sub>t</sub> = 5, = 4,E<sub>t</sub> = 6, = 6 6.R<sub>t</sub> = 5, = 5,E<sub>t</sub> = 3, = 10 7.R<sub>t</sub> = 5, = 6,E<sub>t</sub> = 2, = 8 8.R<sub>t</sub> = 5, = 3,E<sub>t</sub> = 0, = 20 9.R<sub>t</sub> = 5, = 9,E<sub>t</sub> = 7, = 3 10.R<sub>t</sub> = 5, = 10,E<sub>t</sub> = 8, = 7 ? In case it does not hold,calculate the risk premium.
1.Rt = 5, Does the interest rate parity hold in each of the following cases by using the formula R<sub>t</sub> - R<sub>t</sub> <sub> </sub> = (E<sub>e+1 - </sub>E<sub>t</sub>)/E<sub>t</sub> <sub> </sub> ? In case it does not hold,calculate the risk premium. 1.R<sub>t</sub> = 5, = 3,E<sub>t</sub> = 5, = 17 2.R<sub>t</sub> = 6, = 4,E<sub>t</sub> = 5, = 5 3.R<sub>t</sub> = 7, = 5,E<sub>t</sub> = 5, = 8 4.R<sub>t</sub> = 8, = 3,E<sub>t</sub> = 5, = 15 5.R<sub>t</sub> = 5, = 4,E<sub>t</sub> = 6, = 6 6.R<sub>t</sub> = 5, = 5,E<sub>t</sub> = 3, = 10 7.R<sub>t</sub> = 5, = 6,E<sub>t</sub> = 2, = 8 8.R<sub>t</sub> = 5, = 3,E<sub>t</sub> = 0, = 20 9.R<sub>t</sub> = 5, = 9,E<sub>t</sub> = 7, = 3 10.R<sub>t</sub> = 5, = 10,E<sub>t</sub> = 8, = 7 = 3,Et = 5, Does the interest rate parity hold in each of the following cases by using the formula R<sub>t</sub> - R<sub>t</sub> <sub> </sub> = (E<sub>e+1 - </sub>E<sub>t</sub>)/E<sub>t</sub> <sub> </sub> ? In case it does not hold,calculate the risk premium. 1.R<sub>t</sub> = 5, = 3,E<sub>t</sub> = 5, = 17 2.R<sub>t</sub> = 6, = 4,E<sub>t</sub> = 5, = 5 3.R<sub>t</sub> = 7, = 5,E<sub>t</sub> = 5, = 8 4.R<sub>t</sub> = 8, = 3,E<sub>t</sub> = 5, = 15 5.R<sub>t</sub> = 5, = 4,E<sub>t</sub> = 6, = 6 6.R<sub>t</sub> = 5, = 5,E<sub>t</sub> = 3, = 10 7.R<sub>t</sub> = 5, = 6,E<sub>t</sub> = 2, = 8 8.R<sub>t</sub> = 5, = 3,E<sub>t</sub> = 0, = 20 9.R<sub>t</sub> = 5, = 9,E<sub>t</sub> = 7, = 3 10.R<sub>t</sub> = 5, = 10,E<sub>t</sub> = 8, = 7 = 17
2.Rt = 6, Does the interest rate parity hold in each of the following cases by using the formula R<sub>t</sub> - R<sub>t</sub> <sub> </sub> = (E<sub>e+1 - </sub>E<sub>t</sub>)/E<sub>t</sub> <sub> </sub> ? In case it does not hold,calculate the risk premium. 1.R<sub>t</sub> = 5, = 3,E<sub>t</sub> = 5, = 17 2.R<sub>t</sub> = 6, = 4,E<sub>t</sub> = 5, = 5 3.R<sub>t</sub> = 7, = 5,E<sub>t</sub> = 5, = 8 4.R<sub>t</sub> = 8, = 3,E<sub>t</sub> = 5, = 15 5.R<sub>t</sub> = 5, = 4,E<sub>t</sub> = 6, = 6 6.R<sub>t</sub> = 5, = 5,E<sub>t</sub> = 3, = 10 7.R<sub>t</sub> = 5, = 6,E<sub>t</sub> = 2, = 8 8.R<sub>t</sub> = 5, = 3,E<sub>t</sub> = 0, = 20 9.R<sub>t</sub> = 5, = 9,E<sub>t</sub> = 7, = 3 10.R<sub>t</sub> = 5, = 10,E<sub>t</sub> = 8, = 7 = 4,Et = 5, Does the interest rate parity hold in each of the following cases by using the formula R<sub>t</sub> - R<sub>t</sub> <sub> </sub> = (E<sub>e+1 - </sub>E<sub>t</sub>)/E<sub>t</sub> <sub> </sub> ? In case it does not hold,calculate the risk premium. 1.R<sub>t</sub> = 5, = 3,E<sub>t</sub> = 5, = 17 2.R<sub>t</sub> = 6, = 4,E<sub>t</sub> = 5, = 5 3.R<sub>t</sub> = 7, = 5,E<sub>t</sub> = 5, = 8 4.R<sub>t</sub> = 8, = 3,E<sub>t</sub> = 5, = 15 5.R<sub>t</sub> = 5, = 4,E<sub>t</sub> = 6, = 6 6.R<sub>t</sub> = 5, = 5,E<sub>t</sub> = 3, = 10 7.R<sub>t</sub> = 5, = 6,E<sub>t</sub> = 2, = 8 8.R<sub>t</sub> = 5, = 3,E<sub>t</sub> = 0, = 20 9.R<sub>t</sub> = 5, = 9,E<sub>t</sub> = 7, = 3 10.R<sub>t</sub> = 5, = 10,E<sub>t</sub> = 8, = 7 = 5
3.Rt = 7, Does the interest rate parity hold in each of the following cases by using the formula R<sub>t</sub> - R<sub>t</sub> <sub> </sub> = (E<sub>e+1 - </sub>E<sub>t</sub>)/E<sub>t</sub> <sub> </sub> ? In case it does not hold,calculate the risk premium. 1.R<sub>t</sub> = 5, = 3,E<sub>t</sub> = 5, = 17 2.R<sub>t</sub> = 6, = 4,E<sub>t</sub> = 5, = 5 3.R<sub>t</sub> = 7, = 5,E<sub>t</sub> = 5, = 8 4.R<sub>t</sub> = 8, = 3,E<sub>t</sub> = 5, = 15 5.R<sub>t</sub> = 5, = 4,E<sub>t</sub> = 6, = 6 6.R<sub>t</sub> = 5, = 5,E<sub>t</sub> = 3, = 10 7.R<sub>t</sub> = 5, = 6,E<sub>t</sub> = 2, = 8 8.R<sub>t</sub> = 5, = 3,E<sub>t</sub> = 0, = 20 9.R<sub>t</sub> = 5, = 9,E<sub>t</sub> = 7, = 3 10.R<sub>t</sub> = 5, = 10,E<sub>t</sub> = 8, = 7 = 5,Et = 5, Does the interest rate parity hold in each of the following cases by using the formula R<sub>t</sub> - R<sub>t</sub> <sub> </sub> = (E<sub>e+1 - </sub>E<sub>t</sub>)/E<sub>t</sub> <sub> </sub> ? In case it does not hold,calculate the risk premium. 1.R<sub>t</sub> = 5, = 3,E<sub>t</sub> = 5, = 17 2.R<sub>t</sub> = 6, = 4,E<sub>t</sub> = 5, = 5 3.R<sub>t</sub> = 7, = 5,E<sub>t</sub> = 5, = 8 4.R<sub>t</sub> = 8, = 3,E<sub>t</sub> = 5, = 15 5.R<sub>t</sub> = 5, = 4,E<sub>t</sub> = 6, = 6 6.R<sub>t</sub> = 5, = 5,E<sub>t</sub> = 3, = 10 7.R<sub>t</sub> = 5, = 6,E<sub>t</sub> = 2, = 8 8.R<sub>t</sub> = 5, = 3,E<sub>t</sub> = 0, = 20 9.R<sub>t</sub> = 5, = 9,E<sub>t</sub> = 7, = 3 10.R<sub>t</sub> = 5, = 10,E<sub>t</sub> = 8, = 7 = 8
4.Rt = 8, Does the interest rate parity hold in each of the following cases by using the formula R<sub>t</sub> - R<sub>t</sub> <sub> </sub> = (E<sub>e+1 - </sub>E<sub>t</sub>)/E<sub>t</sub> <sub> </sub> ? In case it does not hold,calculate the risk premium. 1.R<sub>t</sub> = 5, = 3,E<sub>t</sub> = 5, = 17 2.R<sub>t</sub> = 6, = 4,E<sub>t</sub> = 5, = 5 3.R<sub>t</sub> = 7, = 5,E<sub>t</sub> = 5, = 8 4.R<sub>t</sub> = 8, = 3,E<sub>t</sub> = 5, = 15 5.R<sub>t</sub> = 5, = 4,E<sub>t</sub> = 6, = 6 6.R<sub>t</sub> = 5, = 5,E<sub>t</sub> = 3, = 10 7.R<sub>t</sub> = 5, = 6,E<sub>t</sub> = 2, = 8 8.R<sub>t</sub> = 5, = 3,E<sub>t</sub> = 0, = 20 9.R<sub>t</sub> = 5, = 9,E<sub>t</sub> = 7, = 3 10.R<sub>t</sub> = 5, = 10,E<sub>t</sub> = 8, = 7 = 3,Et = 5, Does the interest rate parity hold in each of the following cases by using the formula R<sub>t</sub> - R<sub>t</sub> <sub> </sub> = (E<sub>e+1 - </sub>E<sub>t</sub>)/E<sub>t</sub> <sub> </sub> ? In case it does not hold,calculate the risk premium. 1.R<sub>t</sub> = 5, = 3,E<sub>t</sub> = 5, = 17 2.R<sub>t</sub> = 6, = 4,E<sub>t</sub> = 5, = 5 3.R<sub>t</sub> = 7, = 5,E<sub>t</sub> = 5, = 8 4.R<sub>t</sub> = 8, = 3,E<sub>t</sub> = 5, = 15 5.R<sub>t</sub> = 5, = 4,E<sub>t</sub> = 6, = 6 6.R<sub>t</sub> = 5, = 5,E<sub>t</sub> = 3, = 10 7.R<sub>t</sub> = 5, = 6,E<sub>t</sub> = 2, = 8 8.R<sub>t</sub> = 5, = 3,E<sub>t</sub> = 0, = 20 9.R<sub>t</sub> = 5, = 9,E<sub>t</sub> = 7, = 3 10.R<sub>t</sub> = 5, = 10,E<sub>t</sub> = 8, = 7 = 15
5.Rt = 5, Does the interest rate parity hold in each of the following cases by using the formula R<sub>t</sub> - R<sub>t</sub> <sub> </sub> = (E<sub>e+1 - </sub>E<sub>t</sub>)/E<sub>t</sub> <sub> </sub> ? In case it does not hold,calculate the risk premium. 1.R<sub>t</sub> = 5, = 3,E<sub>t</sub> = 5, = 17 2.R<sub>t</sub> = 6, = 4,E<sub>t</sub> = 5, = 5 3.R<sub>t</sub> = 7, = 5,E<sub>t</sub> = 5, = 8 4.R<sub>t</sub> = 8, = 3,E<sub>t</sub> = 5, = 15 5.R<sub>t</sub> = 5, = 4,E<sub>t</sub> = 6, = 6 6.R<sub>t</sub> = 5, = 5,E<sub>t</sub> = 3, = 10 7.R<sub>t</sub> = 5, = 6,E<sub>t</sub> = 2, = 8 8.R<sub>t</sub> = 5, = 3,E<sub>t</sub> = 0, = 20 9.R<sub>t</sub> = 5, = 9,E<sub>t</sub> = 7, = 3 10.R<sub>t</sub> = 5, = 10,E<sub>t</sub> = 8, = 7 = 4,Et = 6, Does the interest rate parity hold in each of the following cases by using the formula R<sub>t</sub> - R<sub>t</sub> <sub> </sub> = (E<sub>e+1 - </sub>E<sub>t</sub>)/E<sub>t</sub> <sub> </sub> ? In case it does not hold,calculate the risk premium. 1.R<sub>t</sub> = 5, = 3,E<sub>t</sub> = 5, = 17 2.R<sub>t</sub> = 6, = 4,E<sub>t</sub> = 5, = 5 3.R<sub>t</sub> = 7, = 5,E<sub>t</sub> = 5, = 8 4.R<sub>t</sub> = 8, = 3,E<sub>t</sub> = 5, = 15 5.R<sub>t</sub> = 5, = 4,E<sub>t</sub> = 6, = 6 6.R<sub>t</sub> = 5, = 5,E<sub>t</sub> = 3, = 10 7.R<sub>t</sub> = 5, = 6,E<sub>t</sub> = 2, = 8 8.R<sub>t</sub> = 5, = 3,E<sub>t</sub> = 0, = 20 9.R<sub>t</sub> = 5, = 9,E<sub>t</sub> = 7, = 3 10.R<sub>t</sub> = 5, = 10,E<sub>t</sub> = 8, = 7 = 6
6.Rt = 5, Does the interest rate parity hold in each of the following cases by using the formula R<sub>t</sub> - R<sub>t</sub> <sub> </sub> = (E<sub>e+1 - </sub>E<sub>t</sub>)/E<sub>t</sub> <sub> </sub> ? In case it does not hold,calculate the risk premium. 1.R<sub>t</sub> = 5, = 3,E<sub>t</sub> = 5, = 17 2.R<sub>t</sub> = 6, = 4,E<sub>t</sub> = 5, = 5 3.R<sub>t</sub> = 7, = 5,E<sub>t</sub> = 5, = 8 4.R<sub>t</sub> = 8, = 3,E<sub>t</sub> = 5, = 15 5.R<sub>t</sub> = 5, = 4,E<sub>t</sub> = 6, = 6 6.R<sub>t</sub> = 5, = 5,E<sub>t</sub> = 3, = 10 7.R<sub>t</sub> = 5, = 6,E<sub>t</sub> = 2, = 8 8.R<sub>t</sub> = 5, = 3,E<sub>t</sub> = 0, = 20 9.R<sub>t</sub> = 5, = 9,E<sub>t</sub> = 7, = 3 10.R<sub>t</sub> = 5, = 10,E<sub>t</sub> = 8, = 7 = 5,Et = 3, Does the interest rate parity hold in each of the following cases by using the formula R<sub>t</sub> - R<sub>t</sub> <sub> </sub> = (E<sub>e+1 - </sub>E<sub>t</sub>)/E<sub>t</sub> <sub> </sub> ? In case it does not hold,calculate the risk premium. 1.R<sub>t</sub> = 5, = 3,E<sub>t</sub> = 5, = 17 2.R<sub>t</sub> = 6, = 4,E<sub>t</sub> = 5, = 5 3.R<sub>t</sub> = 7, = 5,E<sub>t</sub> = 5, = 8 4.R<sub>t</sub> = 8, = 3,E<sub>t</sub> = 5, = 15 5.R<sub>t</sub> = 5, = 4,E<sub>t</sub> = 6, = 6 6.R<sub>t</sub> = 5, = 5,E<sub>t</sub> = 3, = 10 7.R<sub>t</sub> = 5, = 6,E<sub>t</sub> = 2, = 8 8.R<sub>t</sub> = 5, = 3,E<sub>t</sub> = 0, = 20 9.R<sub>t</sub> = 5, = 9,E<sub>t</sub> = 7, = 3 10.R<sub>t</sub> = 5, = 10,E<sub>t</sub> = 8, = 7 = 10
7.Rt = 5, Does the interest rate parity hold in each of the following cases by using the formula R<sub>t</sub> - R<sub>t</sub> <sub> </sub> = (E<sub>e+1 - </sub>E<sub>t</sub>)/E<sub>t</sub> <sub> </sub> ? In case it does not hold,calculate the risk premium. 1.R<sub>t</sub> = 5, = 3,E<sub>t</sub> = 5, = 17 2.R<sub>t</sub> = 6, = 4,E<sub>t</sub> = 5, = 5 3.R<sub>t</sub> = 7, = 5,E<sub>t</sub> = 5, = 8 4.R<sub>t</sub> = 8, = 3,E<sub>t</sub> = 5, = 15 5.R<sub>t</sub> = 5, = 4,E<sub>t</sub> = 6, = 6 6.R<sub>t</sub> = 5, = 5,E<sub>t</sub> = 3, = 10 7.R<sub>t</sub> = 5, = 6,E<sub>t</sub> = 2, = 8 8.R<sub>t</sub> = 5, = 3,E<sub>t</sub> = 0, = 20 9.R<sub>t</sub> = 5, = 9,E<sub>t</sub> = 7, = 3 10.R<sub>t</sub> = 5, = 10,E<sub>t</sub> = 8, = 7 = 6,Et = 2, Does the interest rate parity hold in each of the following cases by using the formula R<sub>t</sub> - R<sub>t</sub> <sub> </sub> = (E<sub>e+1 - </sub>E<sub>t</sub>)/E<sub>t</sub> <sub> </sub> ? In case it does not hold,calculate the risk premium. 1.R<sub>t</sub> = 5, = 3,E<sub>t</sub> = 5, = 17 2.R<sub>t</sub> = 6, = 4,E<sub>t</sub> = 5, = 5 3.R<sub>t</sub> = 7, = 5,E<sub>t</sub> = 5, = 8 4.R<sub>t</sub> = 8, = 3,E<sub>t</sub> = 5, = 15 5.R<sub>t</sub> = 5, = 4,E<sub>t</sub> = 6, = 6 6.R<sub>t</sub> = 5, = 5,E<sub>t</sub> = 3, = 10 7.R<sub>t</sub> = 5, = 6,E<sub>t</sub> = 2, = 8 8.R<sub>t</sub> = 5, = 3,E<sub>t</sub> = 0, = 20 9.R<sub>t</sub> = 5, = 9,E<sub>t</sub> = 7, = 3 10.R<sub>t</sub> = 5, = 10,E<sub>t</sub> = 8, = 7 = 8
8.Rt = 5, Does the interest rate parity hold in each of the following cases by using the formula R<sub>t</sub> - R<sub>t</sub> <sub> </sub> = (E<sub>e+1 - </sub>E<sub>t</sub>)/E<sub>t</sub> <sub> </sub> ? In case it does not hold,calculate the risk premium. 1.R<sub>t</sub> = 5, = 3,E<sub>t</sub> = 5, = 17 2.R<sub>t</sub> = 6, = 4,E<sub>t</sub> = 5, = 5 3.R<sub>t</sub> = 7, = 5,E<sub>t</sub> = 5, = 8 4.R<sub>t</sub> = 8, = 3,E<sub>t</sub> = 5, = 15 5.R<sub>t</sub> = 5, = 4,E<sub>t</sub> = 6, = 6 6.R<sub>t</sub> = 5, = 5,E<sub>t</sub> = 3, = 10 7.R<sub>t</sub> = 5, = 6,E<sub>t</sub> = 2, = 8 8.R<sub>t</sub> = 5, = 3,E<sub>t</sub> = 0, = 20 9.R<sub>t</sub> = 5, = 9,E<sub>t</sub> = 7, = 3 10.R<sub>t</sub> = 5, = 10,E<sub>t</sub> = 8, = 7 = 3,Et = 0, Does the interest rate parity hold in each of the following cases by using the formula R<sub>t</sub> - R<sub>t</sub> <sub> </sub> = (E<sub>e+1 - </sub>E<sub>t</sub>)/E<sub>t</sub> <sub> </sub> ? In case it does not hold,calculate the risk premium. 1.R<sub>t</sub> = 5, = 3,E<sub>t</sub> = 5, = 17 2.R<sub>t</sub> = 6, = 4,E<sub>t</sub> = 5, = 5 3.R<sub>t</sub> = 7, = 5,E<sub>t</sub> = 5, = 8 4.R<sub>t</sub> = 8, = 3,E<sub>t</sub> = 5, = 15 5.R<sub>t</sub> = 5, = 4,E<sub>t</sub> = 6, = 6 6.R<sub>t</sub> = 5, = 5,E<sub>t</sub> = 3, = 10 7.R<sub>t</sub> = 5, = 6,E<sub>t</sub> = 2, = 8 8.R<sub>t</sub> = 5, = 3,E<sub>t</sub> = 0, = 20 9.R<sub>t</sub> = 5, = 9,E<sub>t</sub> = 7, = 3 10.R<sub>t</sub> = 5, = 10,E<sub>t</sub> = 8, = 7 = 20
9.Rt = 5, Does the interest rate parity hold in each of the following cases by using the formula R<sub>t</sub> - R<sub>t</sub> <sub> </sub> = (E<sub>e+1 - </sub>E<sub>t</sub>)/E<sub>t</sub> <sub> </sub> ? In case it does not hold,calculate the risk premium. 1.R<sub>t</sub> = 5, = 3,E<sub>t</sub> = 5, = 17 2.R<sub>t</sub> = 6, = 4,E<sub>t</sub> = 5, = 5 3.R<sub>t</sub> = 7, = 5,E<sub>t</sub> = 5, = 8 4.R<sub>t</sub> = 8, = 3,E<sub>t</sub> = 5, = 15 5.R<sub>t</sub> = 5, = 4,E<sub>t</sub> = 6, = 6 6.R<sub>t</sub> = 5, = 5,E<sub>t</sub> = 3, = 10 7.R<sub>t</sub> = 5, = 6,E<sub>t</sub> = 2, = 8 8.R<sub>t</sub> = 5, = 3,E<sub>t</sub> = 0, = 20 9.R<sub>t</sub> = 5, = 9,E<sub>t</sub> = 7, = 3 10.R<sub>t</sub> = 5, = 10,E<sub>t</sub> = 8, = 7 = 9,Et = 7, Does the interest rate parity hold in each of the following cases by using the formula R<sub>t</sub> - R<sub>t</sub> <sub> </sub> = (E<sub>e+1 - </sub>E<sub>t</sub>)/E<sub>t</sub> <sub> </sub> ? In case it does not hold,calculate the risk premium. 1.R<sub>t</sub> = 5, = 3,E<sub>t</sub> = 5, = 17 2.R<sub>t</sub> = 6, = 4,E<sub>t</sub> = 5, = 5 3.R<sub>t</sub> = 7, = 5,E<sub>t</sub> = 5, = 8 4.R<sub>t</sub> = 8, = 3,E<sub>t</sub> = 5, = 15 5.R<sub>t</sub> = 5, = 4,E<sub>t</sub> = 6, = 6 6.R<sub>t</sub> = 5, = 5,E<sub>t</sub> = 3, = 10 7.R<sub>t</sub> = 5, = 6,E<sub>t</sub> = 2, = 8 8.R<sub>t</sub> = 5, = 3,E<sub>t</sub> = 0, = 20 9.R<sub>t</sub> = 5, = 9,E<sub>t</sub> = 7, = 3 10.R<sub>t</sub> = 5, = 10,E<sub>t</sub> = 8, = 7 = 3
10.Rt = 5, Does the interest rate parity hold in each of the following cases by using the formula R<sub>t</sub> - R<sub>t</sub> <sub> </sub> = (E<sub>e+1 - </sub>E<sub>t</sub>)/E<sub>t</sub> <sub> </sub> ? In case it does not hold,calculate the risk premium. 1.R<sub>t</sub> = 5, = 3,E<sub>t</sub> = 5, = 17 2.R<sub>t</sub> = 6, = 4,E<sub>t</sub> = 5, = 5 3.R<sub>t</sub> = 7, = 5,E<sub>t</sub> = 5, = 8 4.R<sub>t</sub> = 8, = 3,E<sub>t</sub> = 5, = 15 5.R<sub>t</sub> = 5, = 4,E<sub>t</sub> = 6, = 6 6.R<sub>t</sub> = 5, = 5,E<sub>t</sub> = 3, = 10 7.R<sub>t</sub> = 5, = 6,E<sub>t</sub> = 2, = 8 8.R<sub>t</sub> = 5, = 3,E<sub>t</sub> = 0, = 20 9.R<sub>t</sub> = 5, = 9,E<sub>t</sub> = 7, = 3 10.R<sub>t</sub> = 5, = 10,E<sub>t</sub> = 8, = 7 = 10,Et = 8, Does the interest rate parity hold in each of the following cases by using the formula R<sub>t</sub> - R<sub>t</sub> <sub> </sub> = (E<sub>e+1 - </sub>E<sub>t</sub>)/E<sub>t</sub> <sub> </sub> ? In case it does not hold,calculate the risk premium. 1.R<sub>t</sub> = 5, = 3,E<sub>t</sub> = 5, = 17 2.R<sub>t</sub> = 6, = 4,E<sub>t</sub> = 5, = 5 3.R<sub>t</sub> = 7, = 5,E<sub>t</sub> = 5, = 8 4.R<sub>t</sub> = 8, = 3,E<sub>t</sub> = 5, = 15 5.R<sub>t</sub> = 5, = 4,E<sub>t</sub> = 6, = 6 6.R<sub>t</sub> = 5, = 5,E<sub>t</sub> = 3, = 10 7.R<sub>t</sub> = 5, = 6,E<sub>t</sub> = 2, = 8 8.R<sub>t</sub> = 5, = 3,E<sub>t</sub> = 0, = 20 9.R<sub>t</sub> = 5, = 9,E<sub>t</sub> = 7, = 3 10.R<sub>t</sub> = 5, = 10,E<sub>t</sub> = 8, = 7 = 7 Does the interest rate parity hold in each of the following cases by using the formula R<sub>t</sub> - R<sub>t</sub> <sub> </sub> = (E<sub>e+1 - </sub>E<sub>t</sub>)/E<sub>t</sub> <sub> </sub> ? In case it does not hold,calculate the risk premium. 1.R<sub>t</sub> = 5, = 3,E<sub>t</sub> = 5, = 17 2.R<sub>t</sub> = 6, = 4,E<sub>t</sub> = 5, = 5 3.R<sub>t</sub> = 7, = 5,E<sub>t</sub> = 5, = 8 4.R<sub>t</sub> = 8, = 3,E<sub>t</sub> = 5, = 15 5.R<sub>t</sub> = 5, = 4,E<sub>t</sub> = 6, = 6 6.R<sub>t</sub> = 5, = 5,E<sub>t</sub> = 3, = 10 7.R<sub>t</sub> = 5, = 6,E<sub>t</sub> = 2, = 8 8.R<sub>t</sub> = 5, = 3,E<sub>t</sub> = 0, = 20 9.R<sub>t</sub> = 5, = 9,E<sub>t</sub> = 7, = 3 10.R<sub>t</sub> = 5, = 10,E<sub>t</sub> = 8, = 7

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