Suppose that the current exchange rate between the yen and the dollar is 100 = $1 and

Question:

Suppose that the current exchange rate between the yen and the dollar is ¥100 = $1 and that the interest rate is 4% on a one-year bond in Japan and 3% on a comparable bond in the United States. According to the interest-rate parity condition, what do investors expect the exchange rate between the yen and the dollar to be in one year?

Exchange Rate
The value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars...