Purchase Solution

# International Finance Problem: The Interest Rate Parity formula

Not what you're looking for?

The current spot rate is Ringett 2.5/SF. The expected spot rate in one year is Ringett 2.8/SF. The current Swiss interest rate is 8%. What Malaysian interest rate will cause IFE to hold?

The correct answer is 12.32%. I left this problem blank because I followed this formula:
S1-S2/S2 = i\$-iyen/1+iyen

(Note the Yen and USD symbols are used as just an example) In this math problem I would have to use the ringett and the SF (swiss franc).

##### Solution Summary

The solution solves a problem using the Interest Rate Parity formula.

##### Solution Preview

The Interest Rate Parity formula is:
1 + Malaysian interest rate = (Forward ...

##### Income Streams

In our ever changing world, developing secondary income streams is becoming more important. This quiz provides a brief overview of income sources.

##### Balance Sheet

The Fundamental Classified Balance Sheet. What to know to make it easy.

##### Team Development Strategies

This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.

##### SWOT

This quiz will test your understanding of the SWOT analysis, including terms, concepts, uses, advantages, and process.

##### IPOs

This Quiz is compiled of questions that pertain to IPOs (Initial Public Offerings)