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Following information is available. US.A. Europe One-year nominal rate of interest 4% 6% One-year expected inflation 2% 5% Spot rate USD1.14/EUR One-year Forward rate USD1.10/EUR
Following information is available. US.A. Europe One-year nominal rate of interest 4% 6% One-year expected inflation 2% 5% Spot rate USD1.14/EUR One-year Forward rate USD1.10/EUR 1) Using the Relative Purchasing Power Parity, forecast the future spot rate one year from now. 2) Using the International Fisher Effect, forecast the future spot rate one year from now. 
Following information is available. 1) Using the Relative Purchasing Power Parity, forecast the future spot rate one year from n 2) Using the International Fisher Effect, forecast the future spot rate one year from now
Following information is available.
US.A.
Europe
One-year nominal rate of interest
4%
6%
One-year expected inflation
2%
5%
Spot rate
USD1.14/EUR
One-year Forward rate
USD1.10/EUR
1) Using the Relative Purchasing Power Parity, forecast the future spot rate one year from now.
2) Using the International Fisher Effect, forecast the future spot rate one year from now.
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Handbook Of Recent Advances In Commodity And Financial Modeling
Authors: Giorgio Consigli, Silvana Stefani, Giovanni Zambruno
1st Edition
3319613189, 978-3319613185
