If hypothetically, the Japanese yen gives 15 percent interest rate against 10 percent interest rate of Euro deposits—and the expected rate of depreciation of the yen is 10 percent—what will happen to...


If hypothetically, the Japanese yen gives 15 percent interest rate against 10 percent interest rate of Euro deposits—and the expected rate of depreciation of the yen is 10 percent—what will happen to the euro deposits in the foreign exchange market? By how much shall the yen depreciate to bring the foreign exchange market to equilibrium?

Nov 21, 2021
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