Foreign Country: Chile, 1995-2004
US dollar appreciated / depreciated (choose one) in real terms against the currency of foreign country. Q2. During the assigned period, what was the average uncovered rate of return from the US viewpoint for the foreign country? Q3. During the assigned period, what was the average uncovered rate of return from the foreign country's viewpoint? Q4. Based on your answers to questions 2 and 3, given perfect hindsight about interest rates and exchange rate changes during the assigned time period you should have: Invested/ borrowed (choose one) in the US and invested / borrowed (choose one) in foreign country. Q5. Assume that you could both borrow and invest at the average interest rates prevailing in foreign country and in the US during the assigned time period. Also assume that you have a line Percent champe trom yoar aqo \begin{tabular}{|c|c|c|c|c|c|c|c|c|c|c|c|c|c|} \hline & 1005 & 1906 & 1097 & 1000 & 10m & 2000 & 2001 & 2002 & 2003 & 2004 & 2005 & 2006 & 2007 \\ \hline Australa & 46 & 26 : & 02 & 09 & 1.5 & 4.5 & 44 & 30 & 28 & 23 & 27 & 3.5 & 23 \\ \hline Austria & 1.0 & 1.8 & 1.2 & 0.8 & 0.5 & 20 & 2.3 & 17 & 13 & 20 & 2.1 & 17 & 22 \\ \hline Canada & 21 & 1.6 & 1.6 & 10 & 17 & 27 & 25 & 23 & 28 & 1.9 & 22 & 20 & 2.1 \\ \hline Chile & 82 & 7.4 & 6.1 & 5.1 & 3.3 & 38 & 3.6 & 2.5 & 28 & 1.1 & 3.0 & 34 & 44 \\ \hline China & 17.1 & 8. 3 & 28 & -0.9 & -14 & 0.3 & 05 & -0.8 & .12 & 39 & & 1.5 & 4.8 \\ \hline Denmark & 21 & 2.1 & 22 & 1.8 & 25 & 29 & 24 & 24 & 21 & 1.2 & 1.8 & 1.9 & 1.7 \\ \hline Euro Area & 26 & 21 & 1.7 & 12 & 1.1 & 22 & 24 & 23 & 2.1 & 21 & 22 & 22 & 21 \\ \hline Finland & 0.4 & 1.1 & 12 & 1.3 & 1.3 & 2.9 & 27 & 20 & 13 & 0.1 & 0.8 & 13 & 1.6 \\ \hline France & 1.8 & 21 & 1.3 & 0.7 & 0.6 & 1.8 & 1.8 & 19 & 22 & 23 & 1.9 & 1.9 & 1.6 \\ \hline Germany & . & 1.2 & 1.5 & 0.6 & 0.6 & 1.4 & 1.9 & 1.4 & 1.0 & 1.8 & 19 & 1.8 & 23 \\ \hline Greece & . & 79 & 5.4 & 4.5 & 21 & 29 & 37 & 39 & 3.4 & 3.0 & 3.5 & 33 & 30 \\ \hline Indonesia & 9.4 & 8.0 & 62 & 58.4 & 205 & 3.7 & 11.5 & 11.9 & 6.6 & 6.2 & 10.5 & 13.1 & 6.4 \\ \hline Ireland. & 8 & 22 & 1.3 & 21 & 25 & 53 & 40 & 4.7 & 40 & 23 & 22 & 27 & 29 \\ \hline Israel & 10.0 & 11.3 & 90 & 5.5 & $2. & 1.1 & 1.1 & 5.7 & 0.7 & -0.4 & 1.3 & 2.1 & 0.5 \\ \hline thay & 5.4 & 40 & 19 & 20 & 17 & 2.5 & 23 & 26 & 2.8 & 23 & 22 & 22 & 20 \\ \hline Japan & .0 .1 & 0.1 & 18 & 07 & & .0 .7 & & -0.9 & .02 & .00 & -0.3 & 0.2 & 0.1 \\ \hline Korea & 4.5 & 49 & 4.4 & 75 & 08 & 23 & 40 & 28 & 35 & 3.6 & 28 & 22 & 25 \\ \hline Malaynia & 34 & 3.5 & 27 & 5.3 & 27 & 1.5 & 1.4 & 1.8 & 1.0 & 1.5 & 3.0 & 36 & 20 \\ \hline Mexico & 350 & 344 & 20.6 & 159 & 16.6 & 9.5 & 6.4 & 50 & 4.5 & 4.7 & 40 & 3.6 & 4.0 \\ \hline Nethertands & 1.4 & 1.5 & 19 & 18 & 20 & 23 & 5.1 & 39 & 22 & 1.4 & 1.5 & 1.7 & 1.6 \\ \hline Now Zealand & 3.0 & 23 & 1.2 & 13 & -0.1 & 26 & 26 & 27 & 1.8 & 23 & 30 & 3.4 & 24 \\ \hline Norway & 24 & 12 & 26 & 23 & 23 & 31 & 30 & 13 & 25 & os & 15 & 23 & 0.7 \\ \hline Philippines & 8.0 & 9.0 & 59 & 9.7 & 67 & -02 & 6.3 & 3.0 & 3.6 & 5.9 & 7.6 & 6.3 & 28 \\ \hline Singapere & 17 & 14 & 20 & -0.3 & 00 & 1.4 & 10 & .0 .4 & 0.5 & 1.6 & 0.5 & 1.0 & 2.1 \\ \hline South Africa & 6.7 & 7.4 & 8.6 & 6.9 & 5.2 & 53 & 5.7 & 9.2 & 5.9 & 1.4 & 3.4 & 4.6 & 7.1 \\ \hline Spain & 4.6 & 3.6 & 1.9 & 18 & 22 & 35 & 2B & 36 & 31 & 3.1 & 3.4 & 36 & 28 \\ \hline Sweden & 2.5 & 0.5 & 0.7 & -0.3 & 05 & 09 & 24 & 22 & 1.9 & 0.4 & 0.5 & 1.4 & 2.2 \\ \hline Switzedand & 1.8 & 0.8 & 0.5 & 0.0 & 0.8 & 1.6 & 1.0 & 0.6 & 0.6 & 0.8 & 1.2 & 1.1 & 0.7 \\ \hline Thailand & 5.8 & 5.8 & 5.6 & 8.1 & 03 & 16 & 1.7 & 0.6 & 1.8 & 28 & 4.6 & 4.6 & 2.2 \\ \hline Turkey & 89.1 & 80.4 & 857 & B66 & 649 & 549 & 54.4 & 450 & 21.6 & 8.6 & 82 & 9.6 & .88 \\ \hline Unted Kngdom & 27 & 25 & 1.8 & 1.6 & 13 & 08 & 1.2 & 1.3 & 1.4 & 1.3 & 21 & 23 & 2.3 \\ \hline United States & 28 & 29 & 23 & 1.5 & 22 & 3.4 & 28 & 1.6 & 23 & 27 & 3.4 & 32 & 29 \\ \hline \end{tabular} Exchange Rates Percent appreciation (t) or depreciation (t) of the U.S. dollar against the local currency 'Percent appreciation (*) or depreciation () of the U.S. dollat against a group of currencies Short-Term Interest Rates The actual value for 2003 is 0.037 ; the actual value for 2004 is 0.029 ; the actual value for 2005 is 0.029
