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please answer all the parts in detail As for today, assume the following information is available for the Malaysia and United States: The current spot
please answer all the parts in detail
As for today, assume the following information is available for the Malaysia and United States: The current spot rate of US dollar equivalent to RM 4.18 and one-year forward rate is equivalent RM 4.24. home country = Malaysia, foreign =US 1. Calculate the exchange rate if Purchasing Power Parity holds 2. What is the expected exchange rate of US dollar after one-year based on the International Fisher Effect (IFE) concept? 3. Does Interest Rate Parity (IRP) hold? 4. Explain the difference between exchange rate adjustment according to IFE and IRP concept
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