In this question why we have not used covered interest rate parity to compute future spot rate ?
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Acc. to my opinion :
In the end of the writeup there is a comment by Underwood saying we do not hedge the upcoming Japanese yen cash flow that’s why Uncovered IRP is the answer because the Covered IRP is hedged
Under uncovered IRP, the position is left unhedged. Uncovered IRP provide the estimate of future spot rate.
Thankyou Udit
Thankyou Arsh !!