Suppose the spot and three-month forward rates for the yen


Suppose the spot and three-month forward rates for the yen are ¥101.17 and ¥102.22, 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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Financial Management: Suppose the spot and three-month forward rates for the yen
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