Economists are predicting that canadian inflation rate

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Reference no: EM131878418

1. Economists are predicting that Canadian inflation rate will be 4% next year. If the Canadian real rate of 2.5%, what is the nominal rate for the country. [Use the precise formula]

a) 4%

b) 2.5%

c) 6.6%

d) 6.5%

2. The current spot exchange rate between the Australian dollar and the Euro is AUD 1.583/EUR If the interest rate is 6% in Australia and 2% in the eurozone, calculate the spot rate one year from now. Use direct quote, with AUD as the home currency.

a) AUD 1.678/EUR

b) AUD 1.522/EUR

c) AUD 1.649/EUR

d) AUD 1.615/EUR

Reference no: EM131878418

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