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On Sep 18/2022, the rate of return for 1-year treasury bills is around 3.96% in U.S., while it is around 2.03% in China. The
On Sep 18/2022, the rate of return for 1-year treasury bills is around 3.96% in U.S., while it is around 2.03% in China. The CNY-USD exchange rate is 6.98, i.e. 6.98 Chinese yuan can exchange for $1. Suppose that we expect the exchange rate in one year is given by 6.60. (a) What is the expected return in Chinese yuan if a Chinese investor makes investment in USD? (b) Should the Chinese investor make investment in Chinese Yuan or USD?
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Macroeconomics Principles Applications And Tools
Authors: Arthur O Sullivan, Steven M. Sheffrin, Stephen J. Perez
7th Edition
978-0134089034, 9780134062754, 134089030, 134062752, 978-0132555234
