4. For this question, assume the interest parity conditions holds. Also assume that the domestic interest rate is 9% and that the foreign interest rate is 5%. Given this information, we would expect...

Extracted text: 4. For this question, assume the interest parity conditions holds. Also assume that the domestic interest rate is 9% and that the foreign interest rate is 5%. Given this information, we would expect that A) individuals will only hold foreign bonds. B) individuals will only hold domestic bonds. C) the domestic currency is expected to appreciate by 4%. D) the domestic currency is expected to depreciate by 4%.