QUESTION 17 If the inflation rate in the United States is greater than the inflation rate in Britain, other things held constant, the British pound will a appreciate against the US dollar Ob depreciate against the U.S. dollar, cremain unchanged against the U.S. dollar d. appreciate against other major currencies. e appreciate against the dollar and other major currencies QUESTION 18 Currently, a U.S. trader notes that in the 6-month forward market, the Japanese yen is selling at a premium (that is, you receive more dollars per yen in the forward market than you do in the spot market), while the British pound is selling at a discount. Which of the following statement is CORRECT? a. If interest rate parity holds, 6-month interest rates should be the same in the U.S. Britain, and Japan If interest rate parity holds among the three countries, the United States should have the highest 6-month interest rates and Japan should have the lowest rates If interest rate parity holds among the three countries, Britain should have the highest 6-month interest rates and Japan should have the lowest . If interest rate parity holds among the three countries, Japan should have the highest 6-month interest rates and Britain should have the lowest rates. rates If interest rate parity holds among the three countries, the United States should have the highest 6-month interest rates and Britain should have the lowest rates