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Nominal annual interest rates in Germany are 5%. The spot rate for the Euro is $1.21 and the Euro is expected to adjust to a future spot rate (one year from today) of $1.25. According to the international Fisher effect (IFE), what is the nominal interest rate in the United States? Solution according to the IFE, 1.25/1.21 = (1+rus)/1.05 or rus = 8.47%..

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Nominal annual interest rates in Germany are 5%. The spot rate for the Euro is $1.21 and the Euro is expected to adjust to a future spot rate (one year from today) of $1.25. According to the international Fisher effect (IFE), what is the nominal interest rate in the United States? Solution according to the IFE, 1.25/1.21 = (1+rus)/1.05 or rus = 8.47%.

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Nominal annual interest rates in Germany are 5. The spot rate for t.pdf

  • 1. Nominal annual interest rates in Germany are 5%. The spot rate for the Euro is $1.21 and the Euro is expected to adjust to a future spot rate (one year from today) of $1.25. According to the international Fisher effect (IFE), what is the nominal interest rate in the United States? Solution according to the IFE, 1.25/1.21 = (1+rus)/1.05 or rus = 8.47%.