Suppose that there is an asset denominated
Suppose that there is an asset denominated in Chinese Yuans (Renminbi). Currentexchange rate is 6 Renminbi per dollar.1) If the interest rate in Renminbi is 15% and the investor has assetsdenominated in dollars and Renminbi in his portfolio. What is the expecteddepreciation/appreciation of the Chinese currency?2) Price a tree (in dollars) that delivers 60 Renminbi worth of fruit every yearfor ever with an interest rate of 15% assuming the exchange rate does notchange3) Price a tree (in dollars) that delivers 60 Renminbi worth of fruit every yearfor 10 years with an interest rate of 15% assuming the Renminbi depreciates 1%per year
