Exchange Rate Financial Assignment Help

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(1) the interest rate on 6-month treasury bills is 8 percent per annum in the United Kingdom and 4 percent per annum in the United States;

Suppose the exchange rate between the U.S. dollar and the Japanese yen is initially 100 yen per dollar. According to purchasing-power parity, if the price of traded goods rises by 5 percent in the United States and 10 percent in Japan, how much the exchange rate will be?

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