interest rate in India is equal 10%, and in USA it is 6%. What should be the exchange rate to equalize the interest rate. $1=70 INR
As per interest rate parity theory:
=1+rh/1+rf = F1/E0
=1.10/1.06 =F1/70
F1 = 72.6415
interest rate in India is equal 10%, and in USA it is 6%. What should be...