QUESTION 11 Calculate the return for US investors of investing in the following countries. The US is the home country and you do not need to assume that uncovered interest parity holds. In each case the US interest rate is 0.10. If the interest rate in England is 0.10, the exchange rate is 2.0 and the forward rate is 2.1 what is the return for US investors in England. O 0.15 O -0.10 O 0.10 O 0.075 QUESTION 12 The interest rate in Pakistan is 0.4, the exchange rate is 1.0 and market participants expect the exchange rate next year to be 0.9. O - 0.15 O 0.30 O 0.10 O 0.25 QUESTION 13 The interest rate in Iran is 0.20, the exchange rate is 4.0, the forward rate is 4.0 and the risk premium is 0.15. O 0.10 O 0.05 O -0.05 O 0.20

QUESTION 11 Calculate the return for US investors of investing in the following countries. The US is the home country and you do not need to assume that uncovered interest parity holds. In each case the US interest rate is 0.10. If the interest rate in England is 0.10, the exchange rate is 2.0 and the forward rate is 2.1 what is the return for US investors in England. O 0.15 O -0.10 O 0.10 O 0.075 QUESTION 12 The interest rate in Pakistan is 0.4, the exchange rate is 1.0 and market participants expect the exchange rate next year to be 0.9. O - 0.15 O 0.30 O 0.10 O 0.25 QUESTION 13 The interest rate in Iran is 0.20, the exchange rate is 4.0, the forward rate is 4.0 and the risk premium is 0.15. O 0.10 O 0.05 O -0.05 O 0.20

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter13: Open-economy Macroeconomics: Basic Concepts

Section: Chapter Questions

Problem 7PA

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