Tahia Meyers, the chief accountant of the Black Pearl Jewelry Company in Moorea, French Polynesia, expects that the company will need to borrow money in six months to finance new inventory before the start of the main tourist season. Her main bank is unwilling to hazard a guess about the interest rate she will have to pay at that time, but she knows several other pieces of information. The current spot exchange rate is XPF92.15/$ and the Minister of Finance was recently quoted as forecasting the exchange rate in six months to depreciate to XPF95.00/$. She also knows that the risk-free interest rate in the U.S. is 6.5 percent per annum, or 3.25 percent for six months. According to interest rate parity, what is the forecasted equilibrium value for rRF in French Polynesia in six months?

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The Answer of Tahia Meyers, the chief accountant of the Black Pearl Jewelry Company in Moorea, French Polynesia, expects that the company will need to borrow money in six months to finance new inventory before the start of the main tourist season. Her main bank is unwilling to hazard a guess about the interest rate she will have to pay at that time, but she knows several other pieces of information. The current spot exchange rate is XPF92.15/$ and the Minister of Finance was recently quoted as forecasting the exchange rate in six months to depreciate to XPF95.00/$. She also knows that the risk-free interest rate in the U.S. is 6.5 percent per annum, or 3.25 percent for six months. According to interest rate parity, what is the forecasted equilibrium value for rRF in French Polynesia in six months?

Tahia Meyers, the Chief Accountant of the Black Pearl Jewelry