What should the new exchange rate

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Reference no: EM132007480

1. Suppose a Canadian Dollar costs 76 cents in the U.S. Money. IF the market begins in equilibrium, what should the new exchange rate be if the U.S. inflation is 1% higher than Candian inflation?

2. Suppose the U.S prime interest rate is 7.75% and the Japanese prime rate is 8%. The pot exchange rate for the Japense yen is 136.15/$. if the 180-day forward rate is 135.90/$, is the market in equilibrium?

Reference no: EM132007480

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