Question
SHOW WORK PLEASE! 18) If the expected inflation rate is 5% and the real required return is 6%, then the Fisher effect says that the
SHOW WORK PLEASE! 18) If the expected inflation rate is 5% and the real required return is 6%, then the Fisher effect says that the nominal interest rate should be exactly ____. 19) The inflation rate in South Korea is expected to be 5% per year, and the inflation rate in the U.S. is expected to be 2% per year. If the current spot rate is 200 Won/$, what is the expected spot rate in two years? 20) Suppose one-year deposit rates on dollars and Yen are 7% and 4%, respectively. If the current spot rate for Yen is Yen102/$, then the spot rate for Yen two years from now implied by these interest rates is?
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