Question: Suppose the spot and three-month forward rates for the yen are 115.13 and 114.35, respectively. a. Is the yen expected to get stronger or weaker?

Suppose the spot and three-month forward rates for the yen are ¥115.13 and ¥114.35, respectively.

a. Is the yen expected to get stronger or weaker?

b. What would you estimate is the difference between the inflation rates of the United States and Japan?


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