Question 52

Assume that the U.S. interest rate is 12 percent, while Australia's one-year interest rate is 11 percent. Assume interest rate parity holds. If the one-year forward rate of the Australian dollar was used to forecast the future spot rate, the forecast would reflect an expectation of: Group of answer choices appreciation in the Australian dollar's value over the next year. depreciation in the Australian dollar's value over the next year. Information on future interest rates is needed to answer this question. no change in the Australian dollar's value over the next year