Inflation expectations in korea compared to the us

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Reference no: EM139353

Q. Suppose if the spot rate for Won is 800 won equals 1 US $ also yearly interest rate on fixed rate 1 year deposits of won is 9% also for US$ is 3%. Illustrate what is the one-year forward rate for one won in terms of dollars? Pretentious the same rates of interest explain what is the 8-month forward rate for one dollar in terms of won? Illustrate is this an indirect or a direct rate? If the forward rate is an accurate predictor of exchange rates in this case will the won get stronger or weaker against the dollar? Elucidate what does this indicate concerning inflation expectations in Korea compared to the US?

Reference no: EM139353

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