The 1 Year Interest Rate in the U

question 105

Multiple Choice

The 1 year interest rate in the U.S.is 1%.The spot exchange rate for yen is 84.81 to the dollar.The 6 months forward rate is 84.78 to the dollar.These prices indicate that interest rates in Japan,on an annualized basis,are about

• A).07% lower.
• B).07% higher.
• C).035% higher.
• D).7% lower.

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Definitions:

Path Analysis

A statistical technique used to describe the directed dependencies among a set of variables.

Multivariate Analysis

A set of statistical techniques used to analyze data that involves more than one variable, understanding the effect and relationships among them.

Discriminant Analysis

A statistical technique used to classify observations into predefined categories based on several predictor variables.