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Suppose that in Australia, the one-year interest rate is 8.19% and the expected rate of inflation is 6.10%. Suppose further that in New Zealand, the
Suppose that in Australia, the one-year interest rate is 8.19% and the expected rate of inflation is 6.10%. Suppose further that in New Zealand, the expected rate of inflation is 7.76%. The expected rate of inflation in Mexico is 13.80%. Then, it must be that the nominal interest rate in Mexico is: . 16.042% O b. 9.883% . 7.760% O d. There is not enough information in this question to calculate the nominal interest rate in Mexico. e. None of the options in this question are correct.
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