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D Question 34 1 pts Today the nominal annual interest rate in Singapore is 20 percent. The nominal annual interest rate in the United States

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D Question 34 1 pts Today the nominal annual interest rate in Singapore is 20 percent. The nominal annual interest rate in the United States is 8 percent. You expect that annual inflation will be about 9 percent in Singapore and 1 percent in the United States. Today the spot rate of the Singapore dollar is $.63. You believe that the Singapore dollar's exchange rate movements are mostly attributed to purchasing power parity, and that the next year's spot rate will therefore be $ Assume that interest rate parity holds: the one-year forward rate would therefore be $ O 0.57 0.58 O 0.58,0.57 O 0.59:0,56 0.56:0.59 Question 33 1 pts As of today, assume the following information is available: US Mexico Real rate of interest required by investors 2% 2% Nominal interest rate 11% 14% Spot rate (Mexican peso) $0.200 One-year forward rate (Mexican peso) $0.190 Using the differential in expected inflation, the forecast of the next year's Mexican peso spot rate is O 0.196 O 0.194 O 0.190 0.192 0.198 0.200 Question 32 1 pts Assume that the Australian dollar's spot rate is $.95 and that the Australian and U.S. interest rates are initially 8 percent. Then assume that the Australian one-year interest rate increases by 1.5 percentage points, while the U.S. one-year interest rate remains unchanged. Using this information and the international Fisher effect (IFE) theory, the forecast Australian dollar spot rate for one year ahead is $. O 0.98 O 0.91 O 0.93 0.97 0.96 0.99 0.94 0.92 0.95 Question 31 The following information is available: You have $2,000,000 to invest. The current spot rate of the UAE dirham is $.110 The 60-day forward rate of the UAE dirham is $.114 The 60-day interest rate in the United States is 3% The 60-day interest rate in UAE is 2 percent The yield to a U.S. investor who conducts covered interest arbitrage is % O 2.71 0 -2.71 O 6.42 4.56 4.56 0.85 0.85 0-642

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