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Nominal Interest Rates in Cyprus Are 7%,while Nominal Interest Rates

Question 36

Multiple Choice

Nominal interest rates in Cyprus are 7%,while nominal interest rates in the U.S.are 5%.The spot rate for the Cyprus pound (CYP) is $1.50.According to the international Fisher effect (IFE) ,the Cyprus pound should adjust to a new level of:


A) $1.47.
B) $1.53.
C) $1.43.
D) $1.57.

Correct Answer:

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