Where i$ = the US rate, iGBP = the UK rate...using decimal forms of the rates...
(1 + i$) = [Expected future spot rate / spot rate] x (1 + iGBP)
so...
( 1 + i$) / (1 + iGBP) = (Expected future spot rate / 1.53846)
example: i$ = 0.02, iGBP = 0.03
1.02 / 1.03 = EFSP / 1.53846 0.99029 = EFSP / 1.5386
0.99029 * 1.5386 = EFSP
EFSP = 1.52353 [
notice that the higher interest rate currency will depreciate against the lower interest rate currency, conversely, the lower interest rate currency will appreciate against the higher interest rate currency
convert back to cost of one dollar, in pounds: 1 / 1.52353 = 0.65637
I don;t get this. I understand interest rate parity completely having traded FX forwards for 30 years. But the question here is all kinds of awkward to answer because you decided to include partial information and not disclose the question. Why would you do that?
I'm making good profit with penny stock
Check here http://trade-pennystock.checkhere.info
Many new investors are lured to the appeal of a penny stock due to the low price and potential for rapid growth which may be as high as several hundred percent in a few days. Similarly, severe loss can occur and many penny stocks lose all of their value in the long term. Accordingly, the SEC warns that penny stocks are high risk investments and new investors should be aware of the risks involved but you can even make very big money. These risks include limited liquidity, lack of financial reporting, and fraud. A penny stock is a common stock that trades for less than $5 a share. While penny stocks generally are quoted over-the-counter, such as on the OTC Bulletin Board or in the Pink Sheets, they may also trade on securities exchanges, including foreign securities exchanges. In addition, penny stocks include the securities of certain private companies with no active trading market. Although a penny stock is said to be "thinly traded," share volumes traded daily can be in the hundreds of millions for a sub-penny stock. Legitimate information on penny stock companies can be difficult to find and a stock can be easily manipulated.
Hello,
Basically i'm lost. I have a question for university that says 'Find, and interpret, ERe if uncovered interest parity holds' now all we have been given is the interest rates for the UK and America the investment period which is one year and another piece of information saying that it is 65p for one dollar.
I have searched online and wikipedia but everything it said so differently and complicated. If anyone can dumb it down for me so to speak i would be greatly appreciative.
Thank you in advance.
