Suppose the spot and three-month forward rates for the yen are ¥128.79 and ¥135.22,respectively.What is the approximate annual percent difference between the inflation rate in the U.S.and in Japan?
A) 3.93 percent
B) 4.21 percent
C) 16.67 percent
D) 21.52 percent
E) 22.28 percent
Correct Answer:
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