In order to compensate for an expected future decline in the Japanese yen relative to the dollar, the interest rate in Japan must be _____ the interest rate in Canada.
A)higher than
B)lower than
C)equal to
D)fixed relative to

Question

Quizplus · Accepted Answer

If the Japanese yen is expected to decline relative to the dollar, then Japanese investors will demand a higher interest rate to compensate for the expected loss in the value of their investments.

In Order to Compensate for an Expected Future Decline in the Japanese