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MUSu 2012 points Assume that the nominal annual interest rate is 2.5% in the U.S. and 1% in the Japan and the current spot exchange
MUSu 2012 points Assume that the nominal annual interest rate is 2.5% in the U.S. and 1% in the Japan and the current spot exchange rate (St) is Y106.10/$. Assuming interest rate parity holds, calculate exchange rate of the Yen versus the U.S. dollar (St+1) in one year. 122.97/$ None of the answers is correct 106.10/$ 107.68/$ 104.55/$
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