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The spot exchange rate is 110 per $ and the one year ahead forward rate is 105 per $. From this information we can conclude

The spot exchange rate is 110 per $ and the one year ahead forward rate is 105 per $. From this information we can conclude that:

a. The one year interest rate is Japan is lower than the one year interest rate in the US.

b. The one year interest rate is Japan is greater than the one year interest rate in the US.

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