Assume that the Australian one-year interest rate is 14 percent. Also assume that the Australian dollar is expected to appreciate by 8 percent over the next year against the U.S. dollar. What is the expected effective yield on a one-year deposit in Australia made by a U.S. firm?
Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*
*Response times vary by subject and question complexity. Median response time is 34 minutes and may be longer for new subjects.