Predict the Expected Spot Exchange Rate Between the Japanese Yen

question 24

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 United States and that the current spot rate is ¥107/$.

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

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