Assume that the international fisher effect holds. Interest rates in Australia are at 0.5% p.a. and the
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Question:
Assume that the international fisher effect holds. Interest rates in Australia are at 0.5% p.a. and the interest rate in Mexico is 4.5% p.a. you have 120000 aud to invest and the current spot rate is AUD/MXN 14.7. as an Australian investor, what yield would you expect to achieve in Mexico?
Expert Answer:
The international fisher effect suggests that the difference in interest rates between two countries ... View the full answer
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