Nominal interest rates-inflation and exchange rates

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Reference no: EM1345764

1) How much would you expect to receive for a nominal interest rate in Spain if funds can be invested in the U. S. at a rate of 7 % when inflation is expected to be 2.5 % in the U. S. and 7 % in Spain?

a. 5.19 %
b. 7.19 %
c. 11.70 %
d. 12.70 %

Reference no: EM1345764

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