Three approaches to forecasted exchange rates

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Reference no: EM131932585

The exchange rate for the Eastern Caribbean Dollar (XCD) is currently 2.70/$1US. Within three years, the interest rate on a 5 year US government bond is expected to be 1.75% while the interest rate on a comparable tenure note is to be 6%. In your opinion, what do you expect the (XCD/$ US) exchange rate to be after three years? In your discussions use three approaches to forecasted exchange rates.

Reference no: EM131932585

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