Suppose that the annual rate of returns on dollar deposits equals 2% and the rate of returnon euro deposits is 1%. Furthermore, assume that expected exchange rate in a year is$1.1=1 euro and the current exchange rate is $1.08=1 euro. Should you invest in dollardeposits or euro deposits?

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

Suppose the average interest rate on euro bonds is 4% and the average interest rate on U.S. dollar bonds is 6%. Which should the investor choose? The euro bond, because European economies are usually more stable Neither, because bonds have high default rates in both countries. Both, because an investor will choose some euro bonds and some U.S. bonds to diversify O It is not possible to answer without information on exchange rates.

Assume that you buy a 1-year, 168,000-peso Philippine bond that pays 9 percent when the exchange rate is 1 Canadian dollar for 42 pesos. If, after one year, the peso falls to 1 Canadian dollar equals 45 pesos, how much have you gained or lost in Canadian dollars? Round your answer to the nearest dollar amount. loss * $ 4353

Options are gain or loss. Note : don't use chat gp8

Suppose you & classmates are marketing team assembled by your Brazil based firm To estimate demand in the U.S. market for its newly developed product. The market Research firm you hired requires $150,000 to perform a thorough study. But your Group is informed that total research budget for the year is 3 million Brazilian real & That no more than 20% of the budget can be spent on any one project. 16 points a. If the current exchange rate is 5 real/$, will you have the market study Conducted? Why or why not? (show your calculations) b. If the current exchange rate is 3 real/$, will you have the market study Conducted? Why or why not? (show your calculations) c. At what exchange rate your decision from rejecting the proposed research project to accept the Project?

Oolong tea is produced in China and sold in many countries. In the province of Fujian, per 100 grams of Oolong tea sells for 50 yuan. In Kuala Lumpur, per 100 grams of the same Oolong tea sells for RM20. Suppose that the exchange rate is RM0.45 1 yuan. Please do the following calculations based on the above information: 1. How much would it cost in Malaysian currency to buy the tea in Fujian? 2. How much would it cost in China currency to buy the tea in Kuala Lumpur?

Big Mac costs $5.90 in the US and it costs 560 yen in Japan. The market exchange rate is 100 yen per dollar. What is the Big Mac PPP exchange rate?

Suppose the implied exchange rate between euro and USD is $1.17 per euro based on PPP and the Hamburger standard. The actual exchange rate is $1.22. Therefore, euro is misvalued by ______%.

Let's suppose the current exchange for Forint (Hungary currency) vs. Kuna (Croatia currency) is:  55.75 Forint/Kuna. Suppose the interest rate on Hungary's government securities with one-year maturity is 3%, and that of Croatia is 2%. According to the International Fisher Effect model, Forint will _____ against the other currency.