Which country would you expect to face capital inflows

Assignment Help International Economics

Reference no: EM13200771

Suppose that the U.S. dollar-pound sterling spot exchange rate equals $1.60/£, while the expected future rate is $1.64/£. The yield on a one-year U.S. Treasury bill is 9% and on a one-year U.K. Treasury bill the yield is 8%. Does the interest parity condition hold? If not, which country would you expect to face capital inflows and which to face capital outflows?

Reference no: EM13200771

Questions Cloud

Find both the width of the square dining room : an architect has allocated a rectangular space of 377 sq ft for a square dining room and a 16 ft wide kitchen. Find both the width of the square dining room and the length of the entire rectangular space.

Calculation of cross-price elasticity of demand : Sandra purchases 5 pounds of coffee and 10 gallons of milk per month when the price of coffee is $10 per pound. She purchases 6 pounds of coffee and 12 gallons of milk per month when the price of coffee is $8 per pound.

Find the work done pulling the bucket to the top of the well : Find the work done pulling the bucket to the top of the well. Your answer must include the correct units.

State the assembly line that he monitors produces : Julio works as a quality control expert in a beverage factory. The assembly line that he monitors produces about 20,000 bottles in a 24 hour period.

Which country would you expect to face capital inflows : Suppose that the U.S. dollar-pound sterling spot exchange rate equals $1.60/£, while the expected future rate is $1.64/£. The yield on a one-year U.S. Treasury bill is 9% and on a one-year U.K. Treasury bill the yield is 8%.

Components of a legally astute social media marketing : Discuss the four components of a legally astute social media marketing manager who utilizes social media outlets for consumer transactions and how each component can mitigate the risk involved in doing business in cyberspace.

Compute what scores on the test will give an a : You have scores of 99, 93 and 90 on the first 3 tests. You must make a total of 360 in order to get an A. What scores on the last test will give you an A?

How will interest rate affect the equilibrium exchange rate : Suppose the interest rate on British and US bonds is the same (5 percent) and the expected future exchange rate (dollars per pound) is $1.52 per pound. Now the interest rate on British bonds suddenly rises to 10 percent.

How large is the sample space for all ways : How large is the sample space for all ways the three teams can be chosen when the number of employees on each project are as follows.

User Account

All Pages