The current exchange rate applying the concept of Absolute PPP is $1.00 = P50 Assuming the inflation rate in the US is 4.5% and 2.9% in the Philippines, how much is the new exchange rate? %3D
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- Question II: The premium of a 100-strike yen-denominated put on the euro is 8.763. The current exchange rate is 95 /c. What is the strike of the corresponding curo-denominated yen call, and what is its premium?VALUE OF EURO (U.S. dollars per euro) 1.9 1.8 1.7 1.6 1.5 1.4 1.3 1.2 1.1 0 50 100 150 200 250 300 350 400 450 500 550 600 QUANTITY OF EUROS (Billions) At an exchange rate of 1.5 per euro, the quantity of euros demanded is of euros demanded is + (?) billion euros, while at an exchange rate of 1.1 per euro, the quantity sloping. billion euros. This confirms that the demand curve for euros isSuppose the inflation rate in Canada is 1 percent and the inflation rate in Mexico is 3 percent. If the nominal exchange rate in terms of Mexican pesos per Canadian dollar falls by 4 percent, by how much will the real exchange rate (in terms of Mexican goods per Canadian good) change?
- Suppose that exchange rate between the dollar and the peso is in equilibrium when inflation in the U.S. rises to 5.00%. At the same time, inflation in Mexico is 3.50%. If the inflation rate in the U.S. is denoted as I and the inflation rate in Mexico is If, then which of the following expressions represents the percent change in the peso under PPP? 1+If 1+In 1+In 1+1 - - 1 1 0.0145 -1.43% 1+/ +1 1+1 198.57% 1+If 1+1h +1 201.45% According to this formula, percentage change in the peso should be under PPP.2. China and Japan are running with annual inflation rates of 3% and 5% respectively. The expected one-month Currency spot exchange rate is JPY17.01/CNY. What should be the current spot rate between CNY and JPY? CNY 17.34029/JPY CNY 16.686/JPY JPY 17.34029/CNY JPY 16.686/CNYIn 2020, inflation rate in UK is 3.3% and in Spain it is 3.5%. In 2021, inflation rate in UK is 6% and in Spain it is 5.4%. In 2020 1.07EURO / GBP. Assume UK is home country.What is the expected exchange rate in 2022 (2 years later)? Select one: a. 0.931 b. 1.064 c. 1.066 d. 1.072
- USA Inflation Rate: 5.20%. Emirates Inflation Rate: 3.60%. Exchange Rate: 3.4 AED = 1 USD.What will be the exchange rates 10 years later, assuming constant inflation rates and the USA is home country. Select one: a. 0.252 b. 8.571 c. 3.963 d. 2.917Question (1) suppose the british pound U-S dollar exchange rate is currently So=£.50.Further suppose that the inflation rate in Britain is predicted to be 10percent over the year ,coming year and(for the moment)the inflation rate in the United States is predicted to be zero.What do you think the exchange rate will be in a yearThe spot rate is EURO1.9719/OMR. It is expected that EURO may appreciate by 1% after one month. What will be new exchange rate after appreciation? OMR= 1.7740 EUR EUR/OMR= 1.7740 EUR 1.775/OMR OMR 1.775/EUR
- Suppose that the annualized inflation in the US is 3% while annual inflation in Europe is 1%. If the current exchange rate is $1.40 per Euro that would you expect the exchange rate to be in one year? If the exchange rate one year from now turns out to be $1.50 per Euro, what has happened to the real exchange rate?1. Calculate the annual interest rate in France using the below information: The annual interest in USA 3.00% Spot exchange rate: EUR0.77065/USD 1 year Forward exchange rate EUR0.78125/USDSuppose that today is 13 August 2019 and the current exchange rate is HKD 6.20 per AUD 1.00. The figure below shows your prediction with respect to the HKD's movements relative to the AUD between now and mid-September 2019. HKD per AUD 7.2 6.8 6.4 6.0 13/08 18/08 23/08 28/08 2/09 7/09 12/09 today Note: HKD = Hong Kong Dollar; AUD = Australian Dollar. %3D %3D You intend to capitalize on your prediction by using the 15/9/2019-maturity forward contract, which is currently priced at HKD 6.00 per AUD 1.00. Which of the following are you most likely to undertake today to capitalize on your prediction? (Select the best answer.) O a. Long forward contract to buy AUD O b. Short forward contract to sell AUD O C. Long forward contract to sell HKD O d. Either (a) or (c) will work