structions uppose the expected exchange rates are the average expectations by investors of exchange rates in one year. Imagine that the in qually risky assets and are annual rates. Current exchange rate Expected exchange rate Current interest rate (%) United states 3.0 Australia 1.98 A$/US$ 2.09 A$/US$ 5.0 Singapore 1.93 S$/US$ 1.82 S$/US$ 2.0 • Calculate the rate of return for a U.S. dollar investing in the Australian deposit for one year.
structions uppose the expected exchange rates are the average expectations by investors of exchange rates in one year. Imagine that the in qually risky assets and are annual rates. Current exchange rate Expected exchange rate Current interest rate (%) United states 3.0 Australia 1.98 A$/US$ 2.09 A$/US$ 5.0 Singapore 1.93 S$/US$ 1.82 S$/US$ 2.0 • Calculate the rate of return for a U.S. dollar investing in the Australian deposit for one year.
Chapter4: Exchange Rate Determination
Section: Chapter Questions
Problem 23QA
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