Question: ssume that the U . S . one - year interest rate is 8 % and the one - year interest rate on Australian dollars

ssume that the U.S. one-year interest rate is 8% and the one-year interest rate on Australian dollars is 13%. The U.S. annual inflation is expected to be 5%, while the Australian annual inflation is expected to be 7%. The current spot exchange rate of an Australian dollar is $0.689.
You have $100,000 to invest for one year.

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