3.7. TEST YOUR UNDERSTANDING 121
(d)gbp/nok?
- What are the cross bid-ask rates for:
(a)rub/chf?
(b)nok/ytl?
(c) dkk/eur?
(d)czj/chf?
- In Figure 2.8 I showed plots of the gold price and mentioned that, if we had
corrected for inflation, then the 1980 price would be seen to be much above
the current peak: obviously, the small percentage price rise of gold, between
1980 and 2007, must have been way below the percentage rise of theusCPI.
(a) In the above we presumably useusCPIrate to deflate theusdprices. But
is this result generalizable to all countries—is this conclusion necessarily
also valid for Japanese or German investors? Why (not)?
(b) If you think the result does not necessarily hold true elsewhere, what
would you bet w.r.t. a hyper-inflator like Zimbabwe?: if inflation is much
higher, then the real price of gold must have fallen even more—no?
(c) What would guarantee identical real price paths in all countries: APPP,
RPPP, or what?