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Consider the choice between the New Zealand (NZ) and the US one-year bonds from the...

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Accounting

Consider the choice between the New Zealand (NZ) and the US one-year bonds from the point of view of a NZ investor. The one-year NZ nominal interest rate is 5.0%, and the one-year US nominal interest rate is 3.25%. The current exchange rate, E, stands at 1 NZ dollar per 0.58 US dollar. Compute the expected exchange rate next year, E to the power of e end exponent, consistent with uncovered interest parity.

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