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Suppose the spot exchange rate for the Hungarian forint is HUF 203.62. The inflation rate in the United States will be 1 percent per year.
Suppose the spot exchange rate for the Hungarian forint is HUF 203.62. The inflation rate in the United States will be 1 percent per year. It will be 4.0 percent in Hungary. |
a. | What do you predict the exchange rate will be in one year? (Round your answer to 2 decimal places, e.g., 32.16.) |
b. | What do you predict the exchange rate will be in two years? (Round your answer to 2 decimal places, e.g., 32.16.) |
c. | What do you predict the exchange rate will be in five years? (Round your answer to 2 decimal places, e.g., 32.16.) |
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