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Q. What is the interest parity condition?
Answer: The circumstance that the expected returns on deposits of any two currencies are equal when measured in the same currency is called the interest parity condition. It involve that potential holders of foreign currency deposits view them as equally desirable assets that is risk is assumed away. In the notational forms:
R$ = RE + (Ee $/E - E$/E) / E$/E.
explain the source of foreign capital
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You can work on this on your own, or with one partner. If there are more than two names on the submitted work, then I will give a maximum grade of 60 to each person listed on the
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