Assessing interest rate differentials among countries

Reference no: EM131225923

Assessing Interest Rate Differentials among Countries :

In countries experiencing high inflation, the annual interest rate may exceed 50 percent; in other countries, such as the United States and many European countries, annual interest rates are typically less than 10 percent.

Do you think such a large difference in interest rates is due primarily to the difference between countries in the risk-free rates or in the credit risk premiums? Explain.

Reference no: EM131225923

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