Why do some investors continue to invest overseas

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Reference no: EM13935920

1. IFE. Shouldn't the IFE discourage investors from attempting to capitalize on higher foreign interest rates? Why do some investors continue to invest overseas, even when they have no other transactions overseas?

2. Changes in inflation. Assume that the inflation rate in Brazil is expected to increase substantially. How will this affect Brazil's nominal interest rates and the value of its currency (called the real)? If the IFE holds, how will the nominal return to UK investors who invest in Brazil be affected by the higher inflation in Brazil? Explain.

Reference no: EM13935920

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