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1. Answer the following questions using the information given in the table below; Annual Interest Rate Exp. Annual Inflation Rate Turkey 1096 796 USA 396
1. Answer the following questions using the information given in the table below; Annual Interest Rate Exp. Annual Inflation Rate Turkey 1096 796 USA 396 196 a. The current spot rate is $ 0.4762/TL. Using PPP (Purchasing Power Parity), what is your projection of the value of TL/$ one year from now? b. Does Real Interest Parity (International Fisher Effect) hold? Answer this question by calculating and comparing the real interest rate in each country. c. What is the 1-year forward premium/discount for TL against $
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