Expected inflation in canada also in the united states

Assignment Help Business Economics

Reference no: EM1319515

Q. You read in a newspaper to the nominal interest rate is 12 percent (%) per year in Canada also 8 percent (%) per year in the United States. Assume to the real interest rates are equalized in the two countries also to purchasing-power parity holds.

a) Using the Fisher equation Illustrate what can you infer about expected inflation in Canada also in the United States?

b) Illustrate what can you infer about expected change in the exchange rate among the Canadian dollar also the U.S. dollar?

c) A friend proposes a get-rich-quick scheme: borrow from a US bank at 8%, deposit the money in a Canadian bank at 12% also make a 4% profit. Illustrate what is wrong with this scheme?

Reference no: EM1319515

Questions Cloud

Discuss the labour relations process : Define and discuss the labour relations process. Define job security. How has job security changed in the given economic recession?

Explaining probability distribution of data : Explain probability distribution of X (name and parameters).

Mean-standard deviation and z score : Stanford Binet IQ scores have a mean of 100 and a standard deviation of 15. Albert Einstein reportedly had an IQ of 160. Convert Einstein's IQ score to a z score.

System analysis and design : In the System Analysis and Design: Design Patterns – How widely used are design patterns in today’s development environments.

Expected inflation in canada also in the united states : Using the Fisher equation Illustrate what can you infer about expected inflation in Canada also in the United State.

Ethernet mac address : Specify the size of Ethernet MAC addresses. State the Ethernet MAC broadcast address. Explain the format of the Ethernet frame?

Software implementation project : You are working with them on a software implementation project that will add barcode functionality to their current patient record system/custom-designed sleep-study software.

Method the price elasticity of demand for a good : Using the midpoint method the price elasticity of Demand for a good is computed to be approximately

Computing the value of z if area is given : Given that Z is standard normal randam variable. Compute the value of Z if area between –Z and Z is 0.754:

User Account

All Pages