Does the Interest Rate Parity Hold in Each of the Following

question 38

Essay

Does the interest rate parity hold in each of the following cases? In case it does not hold,calculate the risk premium.
A.R_t = 5, = 3,E_t = 5, = 7
B.R_t = 6, = 3,E_t = 5, = 7
C.R_t = 7, = 3,E_t = 5, = 7
D.R_t = 8, = 3,E_t = 5, = 7
E.R_t = 5, = 4,E_t = 5, = 7
F.R_t = 5, = 5,E_t = 5, = 7
G.R_t = 5, = 6,E_t = 5, = 7
H.R_t = 5, = 3,E_t = 6, = 7
I.R_t = 5, = 3,E_t = 7, = 7
J.R_t = 5, = 3,E_t = 8, = 7
K.R_t = 5, = 3,E_t = 5, = 8
L.R_t = 5, = 3,E_t = 5, = 9
M.R_t = 5, = 3,E_t = 5, = 10

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