Does the Interest Rate Parity Hold in Each of the Following

question 66

Essay

Does the interest rate parity hold in each of the following cases by using the formula
R_t - R_t

= (E_{e+1 -} E_t)/E_t

? In case it does not hold,calculate the risk premium.
1.R_t = 5, = 3,E_t = 5, = 17
2.R_t = 6, = 4,E_t = 5, = 5
3.R_t = 7, = 5,E_t = 5, = 8
4.R_t = 8, = 3,E_t = 5, = 15
5.R_t = 5, = 4,E_t = 6, = 6
6.R_t = 5, = 5,E_t = 3, = 10
7.R_t = 5, = 6,E_t = 2, = 8
8.R_t = 5, = 3,E_t = 0, = 20
9.R_t = 5, = 9,E_t = 7, = 3
10.R_t = 5, = 10,E_t = 8, = 7

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