Suppose that an Apple iPhone costs $240 in the United States, £65 in the United Kingdom, and ¥35,000 in Japan. If the exchange rate between the pound and the dollar is $1.80 = £1, the real exchange rate between the pound and the dollar is. (Enter your response rounded to two places.)
Suppose that an Apple iPhone costs $240 in the United States, £65 in the United Kingdom, and ¥35,000 in Japan. If the exchange rate between the pound and the dollar is $1.80 = £1, the real exchange rate between the pound and the dollar is. (Enter your response rounded to two places.)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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give answe the both questions.
Transcribed Image Text:Suppose that an Apple iPhone costs $240 in the United States, £65 in
the United Kingdom, and ¥35,000 in Japan.
If the exchange rate between the pound and the dollar is $1.80 = £1, the
real exchange rate between the pound and the dollar is. (Enter your
response rounded to two places.)
Transcribed Image Text:Suppose that the current exchange rate between the yen and the dollar
is ¥110 = $1 and that the interest rate is 4% on a one-year bond in Japan
and 3% on a comparable bond in the United States. According to
the interest-rate parity condition, what do investors expect the exchange
rate between the yen and the dollar to be in one year?
=$1. (Round your response to two
The exchange rate will be ¥
decimal places.)
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