8. Omni Advisors, an international pension fund manager, uses the concepts of purchasing power parity (PPP) and
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8. Omni Advisors, an international pension fund manager, uses the concepts of purchasing power parity (PPP) and the International Fisher Effect (IFE) to forecast spot exchange rates. Omni gathers the financial information as follows:
Calculate the following exchange rates (ZAR and USD refer to the South African rand and U.S. dollar, respectively):
a. The current ZAR spot rate in USD that would have been forecast by PPP.
b. Using the IFE, the expected ZAR spot rate in USD one year from now.
c. Using PPP, the expected ZAR spot rate in USD four years from now.
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Kirti Kaushal
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Related Book For 
ISE International Financial Management
ISBN: 9781260575316
9th International Edition
Authors: Cheol Eun, Bruce Resnick, Tuugi Chuluun
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