10.9 Suppose that U.S. interest rates are 4 percent more than rates in the EU. a. Would...

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10.9 Suppose that U.S. interest rates are 4 percent more than rates in the EU.

a. Would you expect the dollar to appreciate or depreciate against the euro, and by how much?

b. If, contrary to your expectations, the forward and spot rates are the same, in which direction would you expect financial capital to flow?

Why?

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International Economics

ISBN: 251301

7th Global Edition

Authors: James Gerber

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Question Posted: Oct 23, 2024 05:02 AM

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10.9 Suppose that U.S. interest rates are 4 percent more than rates in the EU. a. Would...

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International Economics

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