Question
1- Current spot rate is TL 3 / $. Nominal interest rates are 10% and 2%, respectively on TL and US$. Real required return is
1- Current spot rate is TL 3 / $. Nominal interest rates are 10% and 2%, respectively on TL and US$. Real required return is 4% percent in Turkey and 1% in the US. Calculate the 1-year forward rate (TL/$), assuming Relative PPP holds.
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Financial Markets And Institutions
Authors: Jeff Madura
9th Edition
1439038848, 978-1439038840
