Answer Both Parts A and B

Derek Tosh and Yen-Dollar Parity. Derek Tosh is attempting to determine whether US/Japanese financial conditions are at parity. The current spot rate is a flat 89.00/S, while the 360-day forward rate is 84.90/$. Forecast inflation is 1.099% for Japan, and 5.898% for the US. The 360-day euro-yen deposit rate is 4.701%, and the 360-day euro-dollar deposit rate is 9.499%. a. Calculate whether international parity conditions hold between Japan and the United States b. Find the forecasted change in the Japanese yen/U.S. dollar (/$) exchange rate one year from now. a. Calculate whether international parity conditions hold between Japan and the United States. The forecast difference in rates of inflation is % (U.S. higher than Japan). (Round to one decimal place.) Help me solve this View an example Get more help. Clear all Check