3) (5 points) You observe the following: S? = Yen 125/$. iRUBLE = 230%/YR . S? = DM 0.65/ POUND. iDM = 1.2%/YR. F? YR = Yen 125/$ S? = RUBLE 1000/$. iYEN =0% /Yr. In equilibrium, the expected spot rate for RUBLE/$ (in 1 YR) expressed as Rubles per Dollar must be Ruble__________/$ 4) The spot rate last year was E 1/$. Over the last year the Euro devalued by 25% against the $. This means that against the Euro: a) $ got stronger by 20% b) $ got stronger by 25% c) $ got stronger by 33.3% d) $ got stronger by 38.2% e) none of the above. 5) Use data form question # 4. The new exchange rate is: a) E 0.75/$ b) E 1.25/$ c) E 1.33/$ d) E 1.38/$ e) none of the above.
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