Please fill in the last two columns using the following information: The expected US dollar-South African rand (R) exchange rate in one year’s time (Ee$/R) is $0.076 for one rand. Calculate the exchange-rate changes for the two spot rates provided below and enter each in column four. If interest parity holds, please write “yes” in the appropriate row of column five. If it does not hold, please write “no.” Interest Rate for the Dollar i$ Interest Rate for the Rand iR Spot Exchange Rate E$/R Exchange-rate change (to 3 decimal places) Interest parity condition holds (Yes/No)? 0.015 0.065 0.075 0.015 0.065 0.080
Please fill in the last two columns using the following information: The expected US dollar-South African rand (R) exchange rate in one year’s time (Ee$/R) is $0.076 for one rand. Calculate the exchange-rate changes for the two spot rates provided below and enter each in column four. If interest parity holds, please write “yes” in the appropriate row of column five. If it does not hold, please write “no.” Interest Rate for the Dollar i$ Interest Rate for the Rand iR Spot Exchange Rate E$/R Exchange-rate change (to 3 decimal places) Interest parity condition holds (Yes/No)? 0.015 0.065 0.075 0.015 0.065 0.080
Micro Economics For Today
10th Edition
ISBN:9781337613064
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter15: International Trade And Finance
Section: Chapter Questions
Problem 10SQP
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Please fill in the last two columns using the following information: The expected US dollar-South African rand (R) exchange rate in one year’s time (Ee$/R) is $0.076 for one rand. Calculate the exchange-rate changes for the two spot rates provided below and enter each in column four. If interest parity holds, please write “yes” in the appropriate row of column five. If it does not hold, please write “no.”
|
Interest Rate |
Interest Rate |
Spot Exchange Rate E$/R |
Exchange-rate change (to 3 decimal places) |
Interest parity |
|
|
0.015 |
0.065 |
0.075 |
|
|
|
|
0.015 |
0.065 |
0.080 |
|
|
|
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