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On the date of sale, December 1, 20X1, the spot rate for the pound was $1.75. Vigeland prepared financial statements at its year end on December 31, 20X1, at which time the spot rate for the pound was $1.90.
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International Fisher effect States that the interest rate differential between two countries should be an unbiased predictor of the future change in the spot rate.
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See also: Market, Price, Trade, Interest, Value
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