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Problem 20-12 Spot versus Forward Rates Suppose the spot and three-month forward rates for the yen are 79.50 and 78.88, respectively. What would you estimate
Problem 20-12 Spot versus Forward Rates
Suppose the spot and three-month forward rates for the yen are 79.50 and 78.88, respectively. What would you estimate is the difference between the annual inflation rates of the United States and Japan? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places (e.g., 32.16).)
Inflation rate differential %
Please give step by step so I am able to learn how to calcualte. Thank you!
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