Omni Advisors, and international pension fund manager

| September 29, 2018

Omni Advisors, and international pension fund manager, uses the concepts of purchasing power parity (PPP) and the International Fisher Effect (IFE) to forecast spot exchange rates. Omni gathers the financial information as follows:Base price level 100Current U.S. price level 105Current South African price level 111Base rand spot exchange rate $0.175Current rand spot exchange rate $0.158Expected annual U.S. inflation 7%Expected annual South African inflation 5%Expected U.S. one-year interest rate 10%Expected South African one-year interest rate 8%Calculate the following exchange rates (ZAR and USD refer to the South African rand and U.S. dollar, respectively):a.The current ZAR spot rate in USD that would have been forecast by PPP.b.Using the IFE, the expected ZAR spot rate in USD one year from now.c.Using PPP, the expected ZAR spot rate in USD four years from now.

Get a 30 % discount on an order above $ 100
Use the following coupon code:
RESEARCH
Order your essay today and save 30% with the discount code: RESEARCHOrder Now
Positive SSL