Question: 1. Suppose that E = 25CH/CF, E = 26CH/CF, and RF = 4%, and RH = 7%. Answer the Foreign rate of return and which

1. Suppose that E = 25CH/CF, E = 26CH/CF, and RF = 4%, and RH = 7%. Answer the Foreign rate of return and which currency the currency traders would buy: Home currency or Foreign currency. Foreign rate of return: Currency to buy: 2. Foreign interest rate is 7%, Home interest rate is 3%, and the expected exchange rate is Ee = 72CH/CF. Answer the equilibrium exchange rate

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