Question
You can currently borrow or invest in the US at 2% and you can borrow or invest in Japan at 3%. The current exchange rate
You can currently borrow or invest in the US at 2% and you can borrow or invest in Japan at 3%. The current exchange rate is $0.01/Yen. Inflation rate in the US is expected to be 5% and expected to be 1% in Japan. If the exchange rates will have adjusted to differences in inflation by the end of one year, show how these numbers will allow you to make profit. Be Specific. Show the profit you would make at the end of the year if you started by borrowing EITHER (choose one) $1 million or 1 million Yen today. Please show all work and do not use excel or a finance calculator.
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