(CFA question) Omni Advisors, an 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: 11eb5c16_4e4d_f5a2_b8ab_7f39dda70a24_SM2659_00 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.

International Financial Management 6th Edition by Sanjiv Eun, Cheol Resnick, Bruce Sabherwal

النسخة 6الرقم المعياري الدولي: 978-0071316972

International Financial Management 6th Edition by Sanjiv Eun, Cheol Resnick, Bruce Sabherwal

النسخة 6الرقم المعياري الدولي: 978-0071316972

تمرين 18

(CFA question) Omni Advisors, an 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:

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.

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