Question
An investor located in the US has two investment options for her $105,000. One option is the US, where the interest rate is 3.5%. The
An investor located in the US has two investment options for her $105,000. One option is the US, where the interest rate is 3.5%. The other option is Australia, where the interest rate is iA. The current exchange rate is $1 US buys 1.6 Australian dollars and the future expected exchange rate is $1 US buys 1.62 Australian. If the investor believes the the two future values are the same, what is iA?
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Financial Markets And Institutions A Modern Perspective
Authors: Anthony Saunders, Marcia Millon Cornett, Marcia Cornett
2nd Edition
007294109X, 978-0072941098
