My name is Luis Daniel Cortes and I am a struggling, unknown writer with three books self-published and currently on sale at Amazon.com and I also own a website with a blog section on economics and finance.
I am anxious to ask questions in regards to carry trades and the risks associated with them.
My very first question is: If you are purchasing a high-yielding currency with a low-yield, devaluating currency, don’t you have to calculate more than the difference between the interest rates?
For example, you buy a currency for a yield of 5% with a currency with a yield of 1%, and you get the 4% difference, but what about if the low yielding currency has also lost 15% of its value?