Bloomberg Assignment #2 (1) Pick two countries: UK and USA and use Bloomberg to find the spot exchange rate, 1-year forward rate, each country’s one-year interest rate at the end of August 2016, and Prove if the IRP condition exists or not. Interest Ra

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Bloomberg Assignment #2 

(1) Pick two countries: UK and USA and use Bloomberg to find the spot exchange rate, 1-year forward rate, each country’s one-year interest rate at the end of August 2016, and Prove if the IRP condition exists or not. 

Interest Rate Parity 

P=(f-s)/s=[ (1+in)/ (1+if)]-1

(2) If the IRP doesn’t exist, offer some possible explanations. 

(3) Find the Spot rate between GBP and US$ at the end of Aug 2017. Was the 1-year forward rate at the end of August 2016 a good predictor for the spot rate at the end of 2017? 

    • 9 years ago
    Bloomberg Assignment #2 (1) Pick two countries: UK and USA and use Bloomberg to find the spot exchange rate, 1-year forward rate, each country’s one-year interest rate at the end of August 2016, and Prove if the IRP condition exists or not. Interest Ra
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