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International Fisher Effect
Nominal annual interest rates in Cyprus are 7.8431%. The spot rate for the Cyprus pound (CYP) is $1.50 and the Cyprus pound is expected to adjust to a future spot rate (one year from today) of $1.53. According to the international Fisher effect (IFE), what is the nominal interest rate in the United States? Do not approximate.
Show how you calculate your answer.
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In this paper we have solved an practical sum pertaining to economics and financial management. Based on forward rate, spot rate we have computed nominal rate of interest, real rate of interest and inflation factor.
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