Suppose you have been offered a new job in Australia in one year and you want to make sure your investments give you similar spending power. If the interest rate in singapore is 1.80 % and Australian interest is 0.35 %, the AUD/SGD spot exchange ate is 0.97 (0.97 AUD for 1 SGD), finally the one year ahead expected inflation in ustralia is 3.80 % and for Singapore is 2.90 %. The real interest in Australia would if Singapore real interest rate is 0.30 percent. ur Answer:

International Financial Management
14th Edition
ISBN:9780357130698
Author:Madura
Publisher:Madura
Chapter20: Short-term Financing
Section: Chapter Questions
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Suppose you have been offered a new job in Australia in one year and you want to
make sure your investments give you similar spending power. If the interest rate in
Singapore is 1.80 % and Australian interest is 0.35 %, the AUD/SGD spot exchange
rate is 0.97 (0.97 AUD for 1 SGD), finally the one year ahead expected inflation in
Australia is 3.80 % and for Singapore is 2.90 %. The real interest in Australia would
be
if Singapore real interest rate is 0.30 percent.
Your Answer:
Answer
Transcribed Image Text:Suppose you have been offered a new job in Australia in one year and you want to make sure your investments give you similar spending power. If the interest rate in Singapore is 1.80 % and Australian interest is 0.35 %, the AUD/SGD spot exchange rate is 0.97 (0.97 AUD for 1 SGD), finally the one year ahead expected inflation in Australia is 3.80 % and for Singapore is 2.90 %. The real interest in Australia would be if Singapore real interest rate is 0.30 percent. Your Answer: Answer
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