Suppose you are a U.S. exporter expecting to receive a payment of NZD1,000 (New Zealand dollars) in 12 months. The annual interest rate on NZD deposits is 5 percent, and the annual interest rate on dollar deposits is 9 percent. If the present exchange rate is $0.50 per NZD and interest rate parity holds, how many dollars do you expect to receive at the maturity date of the export contract?
a. $2,000
b. $1,923
c. $1,000
d. $580
e. $520
e
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a. True b. False Indicate whether the statement is true or false
How do long terms for appointments benefit the Federal Reserve’s Board of Governors?
What will be an ideal response?