The 90-Day Interest Rates Annualized in the U

question 37

Multiple Choice

The 90-day interest rates annualized in the U.S.and Japan are,respectively,10% and 7%,while the direct spot quote for the yen in New York is $.004300.At what 90-day forward rate would interest rate parity hold?

• A).004430
• B).004271
• C).004332
• D).004176

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Definitions:

Wilhelm Wundt

Often referred to as the father of modern psychology, he established the first psychology laboratory in Leipzig, Germany, in 1879.

Stimulus-Response Associations

The connection formed between a stimulus and a natural or learned reaction.

Immediate Experience

Direct, real-time perception and sensation of events without the filter of reflection or analysis.

Unconscious Motivation

Drivers of behavior that are not within an individual's conscious awareness, influencing actions and feelings without the individual realizing it.