Explain what are two assumptions of covered interest parity

Assignment Help International Economics

Reference no: EM131551762

Assignment: International Economics

Please use APA format. This is a MBA course not an Associates Course so please be knowledgable in Economics in order to help. Also Please have access to the textbook. Substantial answers only please. The link below is the actual textbook.

Course Textbook:

Krugman, P., Obstfeld, M., & Melitz, M. (2013). International economics: Theory and policy (9th ed). Upper Saddle River, NJ: Prentice Hall.

1) What is covered interest parity? What are the two assumptions of covered interest parity? How do investors use covered interest arbitrage to maximize their investment returns? At least 550 words.

2) Describe the key factors in foreign exchange market. Explain risk and liquidity as they relate for foreign exchange market. (At least 550 words)

Reference no: EM131551762

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