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interest rates in the US and Japan are 5% and 3% respectively. If the dollar is expected to depreciate against the yen by 1%, investors
interest rates in the US and Japan are 5% and 3% respectively. If the dollar is expected to depreciate against the yen by 1%,
investors will sell yen and buy dollars
the dollar may either appreciate or depreciate
covered interest parity implies that the dollar will depreciate.
investors will sell dollars and buy yen
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