If the Foreign Interest Rate Is 5%, the Current Exchange

question 66

Short Answer

If the foreign interest rate is 5%, the current exchange rate is 5.0 and the expected future exchange rate is 4.0, what is the domestic interest rate according to the interest parity condition?

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Definitions:

Consumer Protection

Rules and policies established to protect consumer rights, promote fair competition, trading practices, and ensure truthful information is provided in the market.

Limited Liability

Liability is restricted to capital contributed; shareholders are shielded from liability for the corporation’s debts.

Law Governing Corporations

A body of laws and regulations that dictate the creation, operation, and dissolution of corporations.

Significance

The importance or meaning of something, especially in terms of its effect or influence on particular situations or contexts.