1. Tor F: If interest rate parity and RPPP hold, then more developed countries will have higher real interest rates. 2. Tor F: Interest rate parity says that the country with the higher rate of interest will see its currency go up in value. 3. Tor F: If your firm has an accounts receivable in yen, it is good practice to offset this by buying calls on the yen. 4. Tor F: The market forward rates are reasonably always (99% of time) equal to the synthetic forward rate. 5. Tor F: The market forward rate reasonably always turns out to be the future spot rate. 6. Tor F: It is much more important to convert costs of equity to global costs of equity than it is to convert costs of debt to global costs of debt. 7. Tor F: In international finance, marginal tax rates are preferred over effective tax rates. 8. Inflation is expected to be 2.5% per year in the USA and 1.5% per year in Japan. If the current FX rate is 110\/$, what will be the FX rate in one year according to RPPP