Question: Question 9 (2 points) The interest rate in the U.S. is 4%, while the interest rate in Switzerland is 7%. The spot rate for the

Question 9 (2 points) The interest rate in the U.S. is

Question 9 (2 points) The interest rate in the U.S. is 4%, while the interest rate in Switzerland is 7%. The spot rate for the Swiss franc is $1.04 per CHF. According to the international Fisher effect (IFE), the Swiss franc's spot exchange rate should by about over the year. appreciate; 2.8% depreciate; 1.87% appreciate; 3.94% depreciate; 2.8% Question 10 (2 points) Assume that the U.S. one-year interest rate is 3% and the one-year interest rate on Australian dollars is 6%. The U.S. expected annual inflation is 5%, while the Australian inflation is expected to be 7%. The spot exchange rate of an Australian dollar is $0.689. According to the PPP, what is the expected exchange rate of the AUD after one year? 6% $0.689 $0.702

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