The Fisher relationship holds: annual U.S. inflation = ??? one-year U.S. interest rate = 3.95%

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The Fisher relationship holds:

• annual U.S. inflation = ???
• one-year U.S. interest rate = 3.95%

• annual Swiss inflation = 0.12%
• one-year Swiss interest rate = 0.80%

1) The spot SFr/$ is 1.2306. What is the annual U.S. inflation?

2) What is the expected spot SFr/$ in one year according to uncovered interest parity?

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ISBN: 9780073530703

9th Edition

Authors: Zvi Bodie, Alex Kane, Alan J. Marcus

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Posted Date: Mar 14, 2023 03:13 AM

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The Fisher relationship holds: annual U.S. inflation = ??? one-year U.S. interest rate = 3.95%

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