Assume that the interest rate on borrowings in India is 1 percent while the interest rate on bank deposits in a U.S.bank is 6 percent.John,an active currency trader borrows in Japanese yen,converts the money into U.S.dollars and deposits it in a U.S.bank.John is engaging in

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John is engaging in carry trade, which involves borrowing in a currency with a low interest rate (Japanese yen) and investing in a currency with a higher interest rate (U.S. dollars) to profit from the interest rate differential.

Assume That the Interest Rate on Borrowings in India Is