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What does the ife suggest about the differential

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Reference no: EM133206167

Assume that the nominal interest rate in Jamaica is 60 percent and the interest rate in the United States is 12 percent for one-year securities that are free from default risk.

a. What does the IFE suggest about the differential in expected in?ation in these two countn'es'?

b. Using this information and PPP theory, describe the expected nominal return to US. investors who invest in Jamaica.

Reference no: EM133206167

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