What should the malawian kwacha

Reference no: EM133430453

Question 1: Today is April 24th 2022. You have just been appointed Chief Economist at Currency Forecasting Inc, an economic research consulting company in Washington DC. Congratulations!
You get a phone call from one of your company's clients.

The client wants to know, assuming that PPP holds, what should the Malawian Kwacha (MKD) versus South African Rand (SAR) exchange rate (quoted as the number of MKD per SAR) be in two years time (i.e., on April 24th 2024)?

You have the following information:
The expected inflation rates for Malawi and South Africa for each of the next 2 years will be as follows:
Malawi's annual inflation rate for each of the next 2 years is expected to be 15% per annum.

South Africa's annual inflation rate for each of the next 2 years is expected to be 5% per annum.

The current spot exchange rate is 55.0 MKD = SAR1 (i.e., 55.0 MKD per SAR).

Question 2: How do you answer the client: What should the
Malawian Kwacha (MKD) versus South African Rand (SAR) exchange rate be in two years time
(i.e., on April 24th 2024)? Your answer is to be given as the number of MKD per SAR and be correct to three decimal places.

Reference no: EM133430453

Questions Cloud

Why does the table below seem accurate : Contextualization: Based on your knowledge of social studies and the Gilded Age, does the table below seem accurate? Why or why not?

What was the emancipation proclamation and what limits did : What is Civil Rights? What was the Emancipation Proclamation and what limits did it have? What were the Enforcement Acts and Civil Rights Acts

What are the holding period and the annualized compounded : What are the holding period and the annualized compounded returns if you buy a stock for $30 and sell it for $90 after ten years?

What is the goal of a health care system : What is the goal of a health care system? Should the goal of a health care system be to provide care once a patient has fallen ill.

What should the malawian kwacha : What should the Malawian Kwacha (MKD) versus South African Rand (SAR) exchange rate (quoted as the number of MKD per SAR) be in two years time

Why does each inadequacy still remain present in singapore : What are 3 examples of each legal and administrative anti-corruption measures in Singapore, when compared to countries such as Denmark, New Zealand, Finland

What is the npv of pigpens project : What is the NPV of Pigpens project? Draw your own table to calculate free cash flows. Provide details on how you get to each line of items

Define urbanization : Pick a health issue of your choice and describe how urbanization and vulnerable populations play a role in the prevalence of that health issue.

How you get to each line of items : Should US Steel go ahead with the new furnace? Draw your own table to calculate free cash flows. Provide details on how you get to each line of items

User Account

All Pages