Question 3 (12 marks) An Australia-based fixed-income asset manager is deciding how to allocate money between Australia and Japan. Note that the base currency in the exchange rate quote (AUD) is the domestic currency for the asset manager. AUDJPY 79.25 One-year forward points (mid-market) -301.9 One-year Australian deposit rate 5.00% One-year Japanese deposit rate 1.00% The fixed-income manager also collects the following information and uses it, along with the international parity conditions, to estimate investment returns and future exchange rate movements. Currency Today's one-year Libor Currency Pair Spot rate Today JPY 0.10% USDJPY 81.30 USD 0.10% GBPUSD 1.5950 GBP 3.00% GBPJPY 129.67 If uncovered interest rate parity holds, what would be the closest today's expected value for the GBPJPY currency pair one year from now? Question 3 (12 marks) An Australia-based fixed-income asset manager is deciding how to allocate money between Australia and Japan. Note that the base currency in the exchange rate quote (AUD) is the domestic currency for the asset manager. AUDJPY 79.25 One-year forward points (mid-market) -301.9 One-year Australian deposit rate 5.00% One-year Japanese deposit rate 1.00% The fixed-income manager also collects the following information and uses it, along with the international parity conditions, to estimate investment returns and future exchange rate movements. Currency Today's one-year Libor Currency Pair Spot rate Today JPY 0.10% USDJPY 81.30 USD 0.10% GBPUSD 1.5950 GBP 3.00% GBPJPY 129.67 If uncovered interest rate parity holds, what would be the closest today's expected value for the GBPJPY currency pair one year from now