Forecast the value of the cyprus pound

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Reference no: EM131176473

Small Corporation would like to forecast the value of the Cyprus pound (CYP) five years from now using forward rates. Unfortunately, Small is unable to obtain quotes for five year forward contracts. However, Small observes that the five year interest rate in the US is 11% while the Cyprus five year interest rate is 15%. Based on this info, the Cyprus pound should (appreciate or depreicate?) by what % over the next five years?

Reference no: EM131176473

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