Reading 19: Foreign Exchange Parity Relations - LOS m ～ Q3 black, Foreign, currency, believes, class

mayanfang1

 

Q3. The Asian Spec Fund, managed by Jonathan Khamal, CFA, engages in currency speculation for its clients. Based in Paris, Khamal believes that there is an opportunity to speculate on the Malaysian Ringgit. The current spot exchange rate is 4.417 Malaysian Ringgit per euro. Khamal wants to determine an expected exchange price one year from today. Assuming the one-year nominal interest rate for the European Economic Community is 11.76% and the Malaysian one-year nominal interest rate is 7.6%, what would be the expected exchange rate for the Malaysian Ringgit one year from today?

A)   4.586 MR/EUR.

B)   4.246 MR/EUR.

C)   4.253 MR/EUR.

flyaway59

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tomathome

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helloalan

 c

htpeng

c

maxsimax

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kungfu1979

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jxfeng419

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