Question
Please can someone show how to do the calculation for inflation. Thankyou in advance The research department of a large financial institution provided inflation expectations
Please can someone show how to do the calculation for inflation. Thankyou in advance
The research department of a large financial institution provided inflation expectations for the next five years. According to the forecasts, UK will have 1.75% more inflation than France and 3.5% higher inflation than South Korea. On the basis of this new evidence, would you consider your proposal with regard to financing the Korean factory? Explain your answer.Thankyou in advance.
Initial investment (KRW) | 200,000 |
Interest rate in UK (5-year loan) | 0.09 |
Interest rate in South Korea (5-year loan) | 0.15 |
Interest rate in France (5-year loan) | 0.12 |
Spot exchange rate: KRW per GBP | 2,000.00 |
Expected appreciation of GBP in relation to KRW | 4% per annum |
Forecasted exchange rate: EUR per GBP | 1.18 |
Expected appreciation of GBP in relation to EUR | 3% per annum |
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