![Business](/tpl/images/cats/ekonomika.png)
Advisors, an international pension fund manager, uses the concepts of purchasing power parity(PPP) and the International Fisher Effect (IFE) to forecast spot exchange rates. Omni gathers the financial information as follows:
Base price level 100
Current U. S. price level 105
Current South African price level 111
Base rand spot exchange rate $0.175
Current rand spot exchange rate $0.158
Expected annual U. S. inflation 7%
Expected annual South African inflation 5%
Expected U. S. one-year interest rate 10%
Expected South African one-year interest rate 8%
Required:
Calculate the following exchange rates (ZAR and USD refer to the South African rand and U. S. dollar, respectively)
a. The current ZAR spot rate in USD that would been forecast by PPP.
b. Using the IFE, the expected ZAR spot rate in USD one year from now.
c. Using PPP, the expected ZAR spot rate in USD four years from now.
![answer](/tpl/images/cats/otvet.png)
Answers: 2
Other questions on the subject: Business
![image](/tpl/images/cats/ekonomika.png)
Business, 21.06.2019 19:30, aquinomoises518
Maker-bot corporation has 10,000 shares of 10%, $90 par value, cumulative preferred stock outstanding since its inception. no dividends were declared in the first two years. if the company pays $400,000 of dividends in the third year, how much will common stockholders receive?
Answers: 2
![image](/tpl/images/cats/ekonomika.png)
Business, 22.06.2019 01:30, josehernamdez3035
Ben collins plans to buy a house for $166,000. if the real estate in his area is expected to increase in value by 2 percent each year, what will its approximate value be five years from now?
Answers: 1
![image](/tpl/images/cats/ekonomika.png)
Do you know the correct answer?
Advisors, an international pension fund manager, uses the concepts of purchasing power parity(PPP) a...
Questions in other subjects:
![Konu](/tpl/images/cats/mkx.png)
![Konu](/tpl/images/cats/mat.png)
![Konu](/tpl/images/cats/mat.png)
Mathematics, 19.05.2021 19:00
![Konu](/tpl/images/cats/mat.png)
![Konu](/tpl/images/cats/mat.png)
Mathematics, 19.05.2021 19:00
![Konu](/tpl/images/cats/mat.png)
![Konu](/tpl/images/cats/mat.png)
![Konu](/tpl/images/cats/mat.png)
Mathematics, 19.05.2021 19:00
![Konu](/tpl/images/cats/en.png)
![Konu](/tpl/images/cats/mat.png)
Mathematics, 19.05.2021 19:00