Suppose that the US interest rate is 8% per year, and that the Japanese interest rate is 4% per year. Suppose further that the exchange rate is Ey/s = Y106/$ and the 6 month forward rate is Fy/$ = Y103.5/$. a) Is covered interest parity (CIP) satisfied?
b) If CIP is not satisfied, explain how you would perform covered interest arbitrage (CIA) to earn a profit.
c) How much profit did you make performing CIA if you initially borrowed $1,000,000?

the correct answer is economics is a game without winners or losers.

unlike sports or games economic is a game without losers or winner rather it is a game where everyone wins. parties of business doing businesses exchange money with each other and hence exchange is done on the basis of goods. one party takes the goods and other sales it so there is winner on both sides. each party values more highly the good it gets than the good it gives up. both sides exchange only because both intend to increase their value. so there is no concept of lose or win.

answer; burned it;

answer(b) gdp is not affected by

scott's production of the jewelry box;