Question

Ja X P18-9 (similar to) Question Help FE Forward rates. Your company has posted you on a 21-month overseas assignment in Budapest, Hungary. You will be N living on the Buda side of the river, but will be spending much of your time on the Pest side. The current indirect rate for the Hungarian forint is 182.32 forints per U.S. dollar. If the anticipated inflation rate in the United States is 4.1% and the A anticipated inflation rate in Hungary is 7.1% (annually), what exchange rate do you anticipate at the end of your assignment? What exchange rate do you anticipate at the end of your assignment? forints per $ (Round to two decimal places.) Da Enter your answer in the answer box and then click Check Answer. All parts showing Clear All Check Answer 29 Lo

Answer 1

to purchasing Spot Rate 7.1%. p.a A ccording power parity theory 182.32 forints per us & us inflation Rate = 4.1%. p.a. Hungary =) 0.31467% P.m; 0.59167%.p.m Inflation Rate for 21 months = 6.608%; 12.43% Forward exchange Rate - Spot Rate & it Hungary inflation Rate It us inflation Rate 182-32 x 1+0.1243 - CHE Tto.6608 192.28 $ 1