What will happen to the us dollar against the turkish lira
Course:- International Economics
Reference No.:- EM13235093

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You are working for George Soros and trying to figure out whether to invest $1B in the U.S. or in Turkey. The interest rate for similar assets is 7% in the US and 3% in Turkey. He needs your answer by Wednesday. What can you do? Go the economist.com and check the July 2011 Big Mac Index. What does it suggest will happen to the US$ against the Turkish Lira? Using this information, what advice would you give him? Explain.

U.S. BM Price: 4.07
Turkey BM Price: 6.50
Implied PPP: 1.60
Actual Exchange Rate: 1.72

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