For IRP, Fischers equation and PPP when dealing with time, is it… When want to find out what is the E(S1) 2 years later. Is it … E(S1)= So[(1+E(Inflation FC)/ (1+E(Inflation DC)]^2 or E(S1)= So[(1+E(Inflation FC)(720/360)/ (1+E(Inflation DC)(720/360)] And if want to find out the FX rate 90 days after, is it… E(S1)= So[(1+E(Inflation FC)/ (1+E(Inflation DC)]^(90/360) or E(S1)= So[(1+E(Inflation FC)(90/360)/ (1+E(Inflation DC)(90/360)] And are they the same for IRP, PPP? F= Spot x [(1+(rFC)(720/360)/ (1+(r DC)(720/360)]
They are not add on rates…gotta use exponent