11 The current spot rate between the U.S. dollar and the Swedish krona Is $1 = 6.8682krona. Assume the Inflation rate in the United States is 5 percent and in Sweden is 1percent.What is the expected spot rate in one year? (Do not round Intermediate calculationsand round your final answer to 4 decimal places.)$ 6.6749 per KronaExpected exchangerate

PURCHASE POWER PARITY Purchasing Power Parity theory is tells about the price differentials…

Answered: The current spot rate between the U.S.…

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter27: Multinational Financial Management

Section: Chapter Questions

Problem 1P

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Suppose that 1 Swedish krona could be purchased in the foreign exchange market today for $0.42. If the krona appreciated 6% tomorrow against the dollar, how many kronas would a dollar buy tomorrow? Do not round intermediate calculations. Round your answer to two decimal places. Suppose the exchange rate between the U.S. dollar and the South African rand was 19 rand = $1 and the exchange rate between the U.S. dollar and the Israeli shekel was 1 shekel = $0.2. What was the exchange rate between the South African rand and the Israeli shekel? Do not round intermediate calculations. Round your answer to two decimal places.
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Purchasing Power Parity If the current spot rate between the U.S. dollar and the Swedish krona was $1 = 7.6523 krona, and if the inflation rate in the United States was 6.1 percent and in Sweden it was 3.1 percent, then what would be the expected spot rate in one year? Note: Round your calculations and answer to 4 decimal places.

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