Question: Answer all three please Several factors affect the exchange rate of a currency with another currency. Which of the following statements are true about the

Answer all three please Several factors affect the exchange rate of aAnswer all three please

Several factors affect the exchange rate of a currency with another currency. Which of the following statements are true about the factors that have an impact on exchange rates? Check all that apply. When interest rates decrease in a country, its currency's value tends to decrease because domestic investors convert their home currency into other currencies to invest in these higher yielding securities. If the demand for a currency increases, the currency's value will decrease relative to other currencies. If a country experiences greater inflation than its trading partners, the value of its currency decreases over time relative to the value of its partners' currencies X If a government intends to let its currency's value fall relative to other currencies, it will sell its currency from e market. The relationship between interest rates and exchange rates can be represented through the concept of interest rate parity. Consider the following: An American investor is considering investing $1,000 in default-free 90-day Japanese bonds that promise a 5% annual nominal return. . The spot exchange rate is 102.19 per dollar The 90-day forward exchange rate is 100.66 per dollar. The investor's annualized return on these bonds-if he or she can lock in the dollar return by selling the foreign currency in the forward market-will be Which of the following statements is implied by interest rate parity theory? An investment in one's home country should have the same return as a similar investment in a foreign country O A product bought in one country should have the same price in other countries, adjusted for exchange rate O If two countries have the same inflation rate, they should have the same interest rate, too O Interest rates in all countries with the same political risk should be the same

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