u you use relative Per as your guide what should the new exchange rate be?...
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u you use relative Per as your guide what should the new exchange rate be? (5 points) (C) Suppose that the spot price of the US dollar is 1 (S/Canadian dollar) and the one-year forward rate is 1.2 (S/Canadian dollar), and the l-year on US deposits is 5 percent. What would the interest rate have to be in Canada to make you indifferent between putting your money there or here? (5 points) (d) Suppose you invest $10,000 in a one-year Japanese bond that pays 2% interest. At the time of your purchase, 80 yen equals $1 while one year later, 85 yen equals $1. What will be the value of your investment in one year when measured in dollars? What is the rate of return on your investment? (5 points)
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