Suppose the spot and three-month forward rates for the yen are 85.14 and 84.61, respectively. (Enter your answer as directed, but do not round intermediate calculations.)

Required:

(a)

Is the yen expected to get stronger or weaker?

(b)	What would you estimate is the percentage difference between the inflation rates of the United States and Japan?

	U.S. $ EQUIVALENT	CURRENCY PER U.S. $
U.K. Pound ()	1.5961	.6265
Canada dollar	1.0057	.9943

Requirement 1:

Which would you rather have, $100 or 100?

(Click to select)100 Dollars100 Pounds

Requirement 2:

Which would you rather have, $100 Canadian or 100?

(Click to select)100 Canadian Dollars100 Pounds

Requirement 3:

(a)	What is the cross-rate for Canadian dollars in terms of British pounds? (Do not include the Canadian dollar sign (C$). Round your answer to 4 decimal places (e.g., 32.1616).)

Cross-rate

C$ /

(b)	What is the cross-rate for British pounds in terms of Canadian dollars? (Do not include the pound sign (). Round your answer to 4 decimal places (e.g., 32.1616).)

Cross-rate

/C$

(b)

What would you estimate is the difference between the inflation rates of the United States and Japan?(Negative amount should be indicated by a minus sign. Round your answer to 2 decimal places (e.g., 32.16).)

Difference between the inflation rates

%