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Question 21 Homework • Answered Confusing We know the interest rate in Japan and the US. What additional information do we neI am stuck on which answer would be correct for this question? Need help!!

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Answer #1

Option D>

Given the rate of interest in the two countries, the parity condition states that difference in the rates of interest in the two countries is equal to the expected appreciation of the exchange rate between two nations. Thus, no other information is needed to calculate the expected appreciation or depreciation of currency given the rate of interest.

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