6. Assume that the interest parity condition holds. Also assume that the U.S. interest rate is 8% while the U.K. interest rate is 6%. Given this information, financial markets expect the pound to _(appreciate / depreciate) by_ %.

There is a flexible exchange rate system and only two countries in the world, the United States and Mexico. If the inflation rate in the United States rises relative to the inflation rate in Mexico, it follows that both the dollar and the peso will appreciate, although the peso will appreciate before the dollar appreciates. both the dollar and the peso will depreciate, although the peso will depreciate before the dollar depreciates. the dollar will appreciate, and the peso will depreciate. There is not enough information to answer the question. the dollar will depreciate, and the peso will appreciate.

Data from The Economist BigMac index from January 2021 shows that the localprice of a Big Mac in Denmark is 30 Danish kroner (DKK) and the price of aBig Mac in Costa Rica is 2350 Costa Rican colón (CRC). The exchange rateXCRC/DKK = 100.279. Assume there is no bid-ask spread. Calculate the Purchasing Power Parity Rate PPPRCRC/DKK. What does this ratemeasure?

Given the interest parity condition, the demand for domestic bonds would decrease if domestic interest rates decreased. In a market where the domestic interest rate is 3.1%, the foreign interest rate is 1.1% and the current exchange rate is 95.00, the future expected exchange rate must be decimal places.) for the interest parity condition to hold. (Round your response to two