You are an investor in the US, thinking about investing 500.000 USD. Numbers say that the nominal
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Question:
You are an investor in the US, thinking about investing 500.000 USD. Numbers say that the nominal interest rate for one year on USD assets is 2%, while in Norway the interest rate is 2.8%. Forecasts estimate that in Norway the inflation is going to be 2.1% during the next year, while in the US 1.1% inflation is expected. The USD/EUR exchange rate is 1.08. Market analysts say that during the next year the USD is expected to appreciate by 0.9% agains the EUR.
What is the reasonable choice with respect to investment? Which currency should be invested in? How can the profit from this situation be maximized?
Related Book For
Financial Accounting Information For Decisions
ISBN: 978-0324672701
6th Edition
Authors: Robert w Ingram, Thomas L Albright
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