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Business, 18.07.2020 01:01 theresamarieuehling2

Assume that the U. S. one-year interest rate is 3 percent and the one-year interest rate on Australian dollars is 6 percent. The U. S. expected annual inflation is 5 percent, while the Australian inflation is expected to be 7 percent. You have $100,000 to invest for one year and you believe that PPP holds. The spot exchange rate of an Australian dollar is $0.689. What will be the yield on your investment if you invest in the Australian market

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