Predict the Expected Spot Exchange Rate Between the Japanese Yen

question 37

Multiple Choice

Predict the expected spot exchange rate between the Japanese Yen and U.S.Dollar, given that inflation in Japan, at 8%, is 4% higher than in the U.S.and that the current spot rate is *107/$.

• A)(*102.72/$)
• B)(*103.04/$)
• C)(*111.12/$)
• D)(*111.28/$)

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Definitions:

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