Suppose that in Japan the interest rate is 8% and inflation is expected to be 3%. Meanwhile,
Question:
Suppose that in Japan the interest rate is 8% and inflation is expected to be 3%. Meanwhile, the expected inflation rate in France is 12%, and the English interest rate is 14%. To the nearest whole number, what is the best estimate of the one year forward exchange premium (discount) at which the pound will be selling relative to the French franc?
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Japans real interest rate is about 5 8 3 From that we can calculate ...View the full answer
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Related Book For 
Foundations Of Multinational Financial Management
ISBN: 9780470128954
6th Edition
Authors: Alan C Shapiro, Atulya Sarin
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