omni advisors pt 1

Omni Advisors, an international pension fund manager, uses the concepts of purchasing power parity (PPP) and the International Fisher Effect (IFE) to forecast spot exchange rates Omni gathers the financial information as follows: 111 $ 0.172 Base price level 100 Current 3.5. price level 105 Current South African price level Fase rand spot exchange rate $ 0.189 Current rand spot exchange rate Expected annual 1.5. inflation 7% Expected annual South African inflation 5X Expected U.S. one-year interest rate 10% Expected South African one year interest rate Calculate the following exchange rates (ZAR and USD refer to the South African rand and US dollar, respectively o. The current ZAR spot rate in USD that would have been forecast by PPP (Do not round intermediate calculations, Round your answer to 4 decimal places.) ax ZAR spot rate under PPP $ 0 1655