Question: Answer the next two questions using the following information: Assume that annual interest rates in the U.S. are 3 percent, while interest rates in Japan

Answer the next two questions using the following information: Assume that annual interest rates in the U.S. are 3 percent, while interest rates in Japan are 6 percent. Assume that the current spot rate is 100/$. 7. According to IRP, what should the forward rate premium or discount of the yen be?

8. If the spot rate is 100/$, what should the one-year forward rate of the dollar be?

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