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Expected spot rates suppose the spot exchange rate for the

Question: Expected Spot Rates. Suppose the spot exchange rate for the Hungarian forint is HUF 249. Interest rates in the United States are 2.7 percent per year. They are 4.8 percent in Hungary.

a. What do you predict the exchange rate will be in one year?

b. In two years?

c. In five years? What relationship are you using?

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Finance Basics: Expected spot rates suppose the spot exchange rate for the

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