Question
Current spot rate is TL 3 / $. Nominal interest rates are 10% and 2%, respectively on TL and US$. Real required return is 4%
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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Multinational Finance Evaluating Opportunities Costs and Risks of Operations
Authors: Kirt C. Butler
5th edition
1118270126, 978-1118285169, 1118285166, 978-1-119-2034, 978-1118270127
