Suppose Interest Rates Are 3 Percent in Japan and 6

Suppose interest rates are 3 percent in Japan and 6 percent in Canada. The current value of the exchange rate is 110 Japanese yen per dollar, and it is generally expected that in one year the exchange rate will be 106.7 yen per dollar. However, new information is released that changes everyone's expectations, and they think the exchange rate in one year will still be 110 yen per dollar. As a result of this change,

A) the demand for Canadian dollars increases.
B) the supply of Canadian dollars decreases.
C) people will borrow in Canada and lend in Japan.
D) the demand for Canadian dollars decreases.
E) A and B.