Assume the inflation rate in the U.S. is 1.45 percent. The spot rate for a foreign...
Assume the inflation rate in the U.S. is 1.45 percent. The spot rate for a foreign currency is 1.18 while the 1-year forward rate is 1.22. What is the approximate rate of inflation in the foreign country?
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4.84% |
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5.04% |
||
|
5.24% |
||
|
5.44% |
||
|
5.64% |
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Assume the inflation rate in the U.S. is 1.45 percent. The spot
rate for a foreign...
Assume the inflation rate in the U.S. is 1.59 percent. The spot rate for a foreign...
Assume the inflation rate in the U.S. is 1.59 percent. The spot rate for a foreign currency is 1.414 while the 1-year forward rate is 1.419. What is the approximate rate of inflation in the foreign country? 1.89% 1.94% 1.99% 2.04% c 2.09%
13. The current spot rate ($/Peso) is .0704. Assume that relative PPP holds, and U.S. inflation...
13. The current spot rate ($/Peso) is .0704. Assume that relative PPP holds, and U.S. inflation is expected to be 3% per year for the next two years while Mexican inflation is expected to be 9% per year over the same period. XYZ Corp of USA has a 20 million peso payable at the end of two years. Calculate the expected amount of dollars needed to make the payment at the end of two years. 14. The current spot rate...
Assume the spot exchange rate is AUD.7064. The expected inflation rate is 1.9 percent in Australia and 1.6 percent in th...
Assume the spot exchange rate is AUD.7064. The expected inflation rate is 1.9 percent in Australia and 1.6 percent in the U.S. What is the expected exchange rate one year from now if relative purchasing power parity exists? AUD.7063 AUD.7085 AUD.7110 AUD.7074 AUD.7092
Assume the following information about the U.S. and New Zealand: U.S. N.Z. Inflation Rate 1.0% 3.0%...
Assume the following information about the U.S. and New Zealand: U.S. N.Z. Inflation Rate 1.0% 3.0% Interest Rate 5.0% 8.0% NZ Spot NZ1 = $0.6204 According to the International Fisher Effect, what is the expected spot rate of the New Zealand dollar in one year? Round your answer to four decimals and no currency signs. Answer:
Assume the current U.S. Dollar-British spot rate is $1.4300/£. If the current nominal one-year interest rate...
Assume the current U.S. Dollar-British spot rate is $1.4300/£. If the current nominal one-year interest rate in the U.S. is 5% and the comparable rate in Britain is 6%, what is the approximate forward exchange rate for 360 days?
Assume a risk-free asset in the U.S. is currently yielding 2.1 percent while a Canadian risk-free...
Assume a risk-free asset in the U.S. is currently yielding 2.1 percent while a Canadian risk-free asset is yielding 2.6 percent. The current spot rate is CAD1.323. What is the approximate 2-year forward rate if interest rate parity holds? CAD1.3414 CAD1.3363 CCAD1.3396 CAD1.3450 CCAD1.3335
The one-year interest rate in Germany 3.0 percent. The spot exchange rate is $1.20/€ and the...
The one-year interest rate in Germany 3.0 percent. The spot exchange rate is $1.20/€ and the one-year forward exchange rate is $1.18/€. What is the one-year interest rate be in the U.S.? Multiple Choice 2.63% 4.75% None of the options. 3.50% 1.28%
Assume the following information regarding U.S. and British currency values and 1-year rates: Spot Rate $1...
Assume the following information regarding U.S. and British currency values and 1-year rates: Spot Rate $1 = £0.8299 1-Year Forward Rate $1 = £0.8631 British 1-Year Interest Rate 7.0% U.S. 1-Year Interest Rate 5.0% Given this information, what is the yield (or profits) to a British investor who conducts covered interest arbitrage with 1,000,000 British pounds. Round to one decimal and give it as a percent. So, if you calculate the answer to be .0438, you would answer 4.4 for...
Assume the current U.S. dollar-British spot rate is $1.3063=£. If the current nominal one-year interest rate...
Assume the current U.S. dollar-British spot rate is $1.3063=£. If the current nominal one-year interest rate in the U.S. is 1.5% and the comparable rate in Britain is 0.75%, what is the approximate forward exchange rate for 360 days? A. £1.2965/$ B. £0.7598/$ C. $1.2965/£ D. £1.3161/$
5. Assume the U.S. interest rate is 7.5 percent, the New Zealand interest rate is 6.5...
5. Assume the U.S. interest rate is 7.5 percent, the New Zealand interest rate is 6.5 percent, the spot rate of the NZS is $.52, and the one-year forward rate of the NZS is $.50. At the end of the year, the spot rate is $.48. Based on this information, what is the effective financing rate for a U.S. firm that takes out a one-year, uncovered NZS loan?
Assume the inflation rate in the U.S. is 1.59 percent. The spot rate for a foreign currency is 1.414 while the 1-year forward rate is 1.419. What is the approximate rate of inflation in the foreign country? 1.89% 1.94% 1.99% 2.04% c 2.09%
Assume a risk-free asset in the U.S. is currently yielding 2.1 percent while a Canadian risk-free asset is yielding 2.6 percent. The current spot rate is CAD1.323. What is the approximate 2-year forward rate if interest rate parity holds? CAD1.3414 CAD1.3363 CCAD1.3396 CAD1.3450 CCAD1.3335
5. Assume the U.S. interest rate is 7.5 percent, the New Zealand interest rate is 6.5 percent, the spot rate of the NZS is $.52, and the one-year forward rate of the NZS is $.50. At the end of the year, the spot rate is $.48. Based on this information, what is the effective financing rate for a U.S. firm that takes out a one-year, uncovered NZS loan?
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