Real interest rate parity to hold, Finance Basics

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Real interest rate parity to hold

The expected rate of inflation in Japan is 12% and the expected rate of inflation in Italy i 9%. In Italy the risk-free rate of interest is 6%. What does the risk-free rate of interest have to be in Japan for real interest rate parity to hold?

a. 3.16%

b. 8.92%

c. 6.0%

d. 12.0%

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Finance Basics: Real interest rate parity to hold

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Finance Basics: Real interest rate parity to hold

Reference No:- TGS040615

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Recent Questions Asked Finance Basics

Q : What was the accounting profit for the new business

Q : Current level of interest rates capital budgeting decision

Q : What does the market expect the 2-year treasury rate

Q : Determining the value of option to wait

Q : Real interest rate parity to hold

Q : Country real interest rate compared to us

Q : Reason for diamond monopoly has weakened in recent years

Q : Estimating the current stock price

Q : Present value of the net cash flows

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Ask an Expert for Answer!!

Finance Basics: Real interest rate parity to hold

Reference No:- TGS040615

Recent Questions Asked Finance Basics

Q : What was the accounting profit for the new business

Q : Current level of interest rates capital budgeting decision

Q : What does the market expect the 2-year treasury rate

Q : Determining the value of option to wait

Q : Real interest rate parity to hold

Q : Country real interest rate compared to us

Q : Reason for diamond monopoly has weakened in recent years

Q : Estimating the current stock price

Q : Present value of the net cash flows

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