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Future value of the domestic currency

problem

Suppose the interest rate on a domestic debt instrument is 10% and the expected rate of inflation is 5%. Further, suppose that the foreign nominal rate on a similar instrument is 6% and expected foreign inflation rate is 4%. Based upon the real interest rates what is your forecast of the future value of the domestic currency? describe.

 

Business Economics, Economics

  • Category:- Business Economics
  • Reference No.:- M927030

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