What shall the one-year forward rate for renminbi be if the


Assume the following information is available for the U.S. and China:

                          U.S.            China

Nominal one-year interest rate            5%            2%

Expected inflation                 4.5%            0.5%

Spot rate                        ----- $.2000/renminbi

What shall the one-year forward rate for renminbi be if the interest rate parity holds?(Use the exact formula for calculations.)

    $0.1943/renminbi  

      $0.2059/renminbi

      $0.1923/renminbi  

      $0.2080/renminbi  

      $0.2000/renminbi

Request for Solution File

Ask an Expert for Answer!!
Financial Management: What shall the one-year forward rate for renminbi be if the
Reference No:- TGS02307532

Expected delivery within 24 Hours