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Assume that the 1 year inflation rate in Barbados is 2.5%, while the 1 year inflation rate in the U.S. is 3.00%. The current spot
Assume that the 1 year inflation rate in Barbados is 2.5%, while the 1 year inflation rate in the U.S. is 3.00%. The current spot rate is US$ 0.98/BBD. If the Purchasing Power Parity holds, the Barbados dollar (BBD) should, in about a year's time, to depreciate:US$ 0.985/BBD depreciate: US$ 0.978/BBD appreciate: US$ 0.985/BBD appreciate; US$ 0.978/BBD D Question 19 1 pts The current 1-year nominal interest rate in Cyprus is 3.5%, while the current 1-year nominal interest rate in the U.S. is 5%, The current spot rate for the Cyprus pound (CYP) is US$1.50/CYP. If the international Fisher effect (IFE) holds, the Cyprus pound should, in about a year's time. to a new level of depreciate: 51.5217/CYP appreciate: $1.5217/CYP depreciate: $1.4720/CYP appreciate: $14720/CYP
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