Question: U . S . interest rate is 5 . 5 0 % , Yen interest rate is 1 % , exchange rate 1 4 9
US interest rate is Yen interest rate is exchange rate Yen per USD; You are borrowing Yens and planning to do a carry trade investing it in US
a If in year from now the exchange rate is yen per USD, which is your gain loss measured in USD from this operation?
b If in year from now, the exchange rate is yen per USD which is your gain loss measured in USD from the strategy?
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