Differential between todays spot rate and the forward rate

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1. If everyone expects a currency exchange rate in 6 months to be higher than it is today (so that it will come back to PPP), would this be reflected in the differential between today's spot rate and the forward rate?

2. What kind of characteristics of goods are most likely to obey PPP (and drive diverging economies back toward it)?

3. Would you expect import and export firms to help make interest rate parity come true?

Reference no: EM131243316

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