What should be the interest rate in the eurozone

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Reference no: EM13222779

If the current exchange rate is €1.5/£1 and is expected to fall to €1.45/£1 next year, and if the current nominal interest rate in the United Kingdom is 8%, what should be the interest rate in the eurozone (assume that there are no differences in risk, liquidity, or information characteristics), according to the nominal interest rate parity condition?

Reference no: EM13222779

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