"You borrow in the U$.$S$.$ dollar, convert the borrowed funds to a foreign currency, earn the interestrate on the foreign currency, and at the end convert the foreign currency back to the dollarand return the dollar loan plus interest. If the interest rate on the foreign currency is higher than the dollar interest rate, you would definitely make a profit on the investment." True or false?

Select one:

a$.$ True

b$.$ False

Two countries, the U$.$S$.$ and Japan, produce only one good, apple. Suppose the price of the apple in the U$.$S$.$ is $$1.$ and in Japan, $100.$The price of the apple over the next year is expected to rise to $$1\mathrm{.}2$ in the U$.$S$.$ and $110$ in Japan, what is the expected exchange rat in one year?

Select one:

a$.97\mathrm{.}66$ yens

b$.95\mathrm{.}87$ yens

c$.91\mathrm{.}67$ yens

d$.93\mathrm{.}34$ yens