(1) The interest rate for Swiss Franc is isr=12% and for Japanese yen is iy=10%. The expected inflation rate in Switzerland for the next year is 5%. According to the International Fisher Effect, the expected inflation rate and real interest rate in Japan for next year are respectively, Select one: a. 2.0% and 5.0% b.3.5% and 7.0% c. 3.1% and 6.7% d. 2.1% and 4.1% e. 7.0% and 7.0% Which one of the following statements is correct about the exchange rates? Select one: Price of currency futures(or forwards) will be slightly lower than the spot exchange rate at maturity. Current interest rates are is=1% and ie=3.5% and they will stay constant for many years. We would expect the Euro to appreciate against dollar according to the uncovered interest rate parity. The European Central Bank announces to increase interest rate by 0.1%. The market consensus was 0.2% increase before the announcement. Upon the news, we would see euro to appreciate. A country with high inflation may see its currency to appreciate according to the asset market approach. When the central bank of Australia raises interest rate to a level that is more than all traders expected, i.e. an unexpected rise in interest rate, the Australian dollar will depreciate