last minute question if anyone can help. not really understanding the reasoning behind the answer. Nominal spot rate in one year is .350 C/$ and implied Future spot rate is 0.476 based on inflation rates and spot rate one year ago. Doesn’t this mean C appreciated in real terms? obviously not, but can someone explain to me why.
sorry i got it, it was $/C, i need to read the question better.
Future spot rate is determined by covered IRP Uncovered IRP, RPPP determine E(s) Can make a huge difference in your answer.