Traded in markets without any governmental restrictions

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Reference no: EM131975861

Two countries, Cambria and Nubira, have nominal interest rates of 2 percent and 5 percent, respectively. (Assume annual compounding.) These interest rates are inferred from the yields of government debt instruments and are applicable over the next four years. The currencies of these two countries, the Cab and the Nub (ISO codes are CAB and NUB) are freely traded in markets without any governmental restrictions. The current exchange rate is CABNUB = 1.5000. Estimate the value of CABNUB at t=2 years. (use x.xxxx)

Reference no: EM131975861

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