Advisors, an international pension fund manager, uses the concepts of purchasing power parity(PPP) and the International Fisher Effect (IFE) to forecast spot exchange rates. Omni gathers the financial information as follows:
Base price level 100
Current U. S. price level 105
Current South African price level 111
Base rand spot exchange rate $0.175
Current rand spot exchange rate $0.158
Expected annual U. S. inflation 7%
Expected annual South African inflation 5%
Expected U. S. one-year interest rate 10%
Expected South African one-year interest rate 8%
Required:
Calculate the following exchange rates (ZAR and USD refer to the South African rand and U. S. dollar, respectively)
a. The current ZAR spot rate in USD that would been forecast by PPP.
b. Using the IFE, the expected ZAR spot rate in USD one year from now.
c. Using PPP, the expected ZAR spot rate in USD four years from now.
Answers: 2
Business, 22.06.2019 09:00
What should a food worker use to retrieve ice from an ice machine?
Answers: 1
Business, 23.06.2019 01:30
Which of the following is considered part of a country’s infrastructure?
Answers: 3
Business, 23.06.2019 12:50
Jason is looking for an engagement ring to offer his girlfriend. he doesn't have enough money. which jewelry stores will have the cheapest
Answers: 2
Business, 23.06.2019 21:00
During winter, red foxes hunt small rodents by jumping into thick snow cover. researchers report that a hunting trip lasts on average 19 minutes and involves on average 7 jumps. they also reported that, surprisingly, 79% of all successful jumps are made in the northeast direction. three variables are mentioned in this report. the third variable mentioned is
Answers: 2
Advisors, an international pension fund manager, uses the concepts of purchasing power parity(PPP) a...
Mathematics, 27.08.2019 22:30
Mathematics, 27.08.2019 22:30
Mathematics, 27.08.2019 22:30
Mathematics, 27.08.2019 22:30
Social Studies, 27.08.2019 22:30
English, 27.08.2019 22:30
Biology, 27.08.2019 22:30
Mathematics, 27.08.2019 22:30
Biology, 27.08.2019 22:30
History, 27.08.2019 22:30
Mathematics, 27.08.2019 22:30
History, 27.08.2019 22:30
English, 27.08.2019 22:30