ESSENTIAL OF CORP FINANCE W/CONNECT
ESSENTIAL OF CORP FINANCE W/CONNECT
8th Edition
ISBN: 9781259903175
Author: Ross
Publisher: MCG CUSTOM
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Chapter 18, Problem 3CTCR

Exchange Rates. The exchange rate for the Australian dollar is currently A$1.40. This exchange rate is expected to rise by 10 percent over the next year.

a.    Is the Australian dollar expected to get stronger or weaker?

b.    What do you think about the relative inflation rates in the United States and Australia?

c.    What do you think about the relative nominal interest rates in the United States and Australia? Relative real rates?

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