(Answered) Suppose that the 3 months interest rates annualized in

Statistics

Suppose that the 3 months interest rates (annualized )in China and Australia are 1 % and 6% respectively. Further GG Bank quotes a spot rate of RMB 82.64 and 90 day forward rate of 81.30RMB.

Does interest rate parity hold? WHERE would you invest and where would you borrow?

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