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What should be the 12-month interest rate

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Question 1: If inflation in the next 12 months is expected to be 4% and investors in general require a real rate of return of 2%. What should be the 12-month interest rate?

Question 2: If interest rate is 4.5% in Canada and 8% in Mexico, according to IFE, what should be the percentage change in the value of CAD1 against Mexico Peso (MXN) in the future?

Question 3: If interest rate is 4.5% in Canada and 3% in UK, according to IFE, what should be the percentage change in the value of GBP1 against CAD in the future?

Reference no: EM132473898

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