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b) U.S. interest rate is 5.50%, Yen interest rate is 2%, exchange rate 129Y per USD; You are borrowing 1,000,000Y and planning to do a

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b) U.S. interest rate is 5.50%, Yen interest rate is 2%, exchange rate 129Y per USD; You are borrowing 1,000,000Y and planning to do a carry trade investing it in US. 1) If in 1 year from now the exchange rate is 145Y per USD, which is your gain (loss) measured in USD from this operation? 2) If in 1 year from now, the exchange rate is 115Y per USD which is your gain (loss) measured in USD from the strategy

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