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  3. Study Set
    International Financial Management
  4. Exam
    Exam 9: Forecasting Exchange Rates
  5. Question
    Since the Forward Rate Does Not Capture the Nominal Interest
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Since the Forward Rate Does Not Capture the Nominal Interest

Question 63

Question 63

True/False

Since the forward rate does not capture the nominal interest rate between two countries, it should provide a less accurate forecast for currencies in high-inflation countries than the spot rate.

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