Briefly discuss the difference between the covered interest arbitrage and the uncovered interest arbitrage and...
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Finance
Briefly discuss the difference between the covered interest arbitrage and the uncovered interest arbitrage and under what condition they are exercised.
Briefly explain the spot price and the forward price and discuss whether the spot price is always less /more than the forward price or equal to the forward price. Also discuss when it can be said that the currency is trading at a premium / discount.
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