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Why do you think currencies of countries with high inflation rates tend to

Why do you think currencies of countries with high inflation rates tend to have forward discounts



1. Inflation Effects on the Forward Rate. Why do you think currencies of countries with high inflation rates tend to have forward discounts?
2.	Changes in Forward Premiums. Assume that the Japanese yen- forward rate currently exhibits a premium of 6 percent and that interest rate parity exists. If U.S. interest rates decrease, how must this premium change to maintain interest rate parity? Why might we expect the premium to change?



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23 Apr 2016

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  1. Genius

    Why do you think currencies of countries with high inflation rates tend to have forward discounts

    Why do you think currencies of countries with high inflation rates tend to have forward discounts ****** ******
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