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What is the nominal interest rate in venezuela

Assignment Help Business Economics
Reference no: EM133133369

QUESTION 1

You have the following information. The current nominal interest rate for a 1-year deposit in a U.S bank is 5% (0.05). The current spot exchange rate between the U.S and Venezuela is 1.0 (U.S dollars per Venezuelan Bolivar's). The 1-year forward exchange rate between the US and Venezuela is 0.50. You can assume that UIP holds. What is the nominal interest rate in Venezuela?

  • 0.73
  • 1.05
  • 0.90
  • 0.07
  • We do not have enough information

QUESTION 2

What is the expected spot U.S exchange rate one year from now?

  • 0.25
  • 1.0
  • 0.05
  • 1.5
  • 1.0

QUESTION 3

Where should you invest, the US or Venezuela?

  • The US
  • Venezuela
  • They are the same.
  • We do not have enough information.

Reference no: EM133133369

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