Inflation and Exchange Rates Go to www.marketvector.com and follow the Exchange Rates link. Select the Australian Dollar link. Is the U.S. dollar expected to appreciate or depreciate compared to the Australian dollar over the next six months? What is the difference in the annual inflation rates for the United States and Australia over this period? Assume that the anticipated rate is constant for both countries. What relationship are you relying on in answering? 

Interest Rate Parity Go to the Financial Times site at www.ft.com, click on the Markets link and then the Currencies link. Find the current exchange rate between the U.S. dollar and the euro. Next, follow the Currencies home link and the Money rates link to find the U.S. dollar LIBOR and the Euro LIBOR interest rates. What must the one-year forward rate be to prevent arbitrage? What principle are you relying on in your answer?

 

 

Answer rating: 100% (QA)

First lets compute the needed variables stepbystep Cost of Preferred Equity Annual Preferred Dividend Annual Dividend Par Value per Share Annual Prefe... View the full answer