sorry , I could not understand. Why Baroque’s expectation is consistent with uncovered interest rate parity? it keep saying 4% differential, but Baroque’s 5%, which I think not comply to any interest rate theory… Thanks.
There is no mock 3. ?
he is talking about Sample exam 3. I guess it was 4% and question said 5% so there is 1% difference which can be removed by arbitrage. Just my 2 cents!!!