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You are given the following data: Country D's currency is the LC and the 1-year forward exchange rate is LC 2.75/$. a In equilibrium, what
You are given the following data: Country D's currency is the LC and the 1-year forward exchange rate is LC 2.75/$. a In equilibrium, what should be the spot exchange rate today? b. During the year, has the dollar strengthened or weakened against LC? Explain. If the real risk-free rate is 2.4 percent and the expected inflation rate is 2.8 percent, what is the nominal, risk-free rate, r_RF? You have the following information: the expected inflation rate, I, is 3.2 percent, and the real risk-free rate, risk-free rate, r*, is 2.1 percent. a. What is the inflation premium, IP?b. What is the nominal, risk-free rate, r_RF? Assume that the real risk-free rate is 2.75 percent, the expected inflation rate is 2.433 percent, and the risk premium is 3.75 percent. a. What is the inflation premium, IP? b. What is the nominal, risk-free rate, r_RF? c. What is the nominal, risk-adjusted rate, r
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