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5) You notice that the US interest rate is at 3% while Japan interest rate is at 1%. Currently the spot exchange rate for Yen

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5) You notice that the US interest rate is at 3% while Japan interest rate is at 1%. Currently the spot exchange rate for Yen / USD is at 100. a) Explain the Interest Rate Parity (IRP) condition b) What will be the forward exchange rate according to Interest Rate Parity

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