If the Yield on a Japanese Government Security Is 6

Multiple Choice

If the yield on a Japanese government security is 6%, the yield on a U.S.government security of the same maturity is 4%, and the exchange rate of the dollar to the Japanese yen is expected to depreciate by 3%, then

A) Americans are likely to buy Japanese government securities
B) Japanese people are likely to buy American government securities
C) the Fed is likely to intervene in the foreign exchange market by buying Japanese yen
D) the Japanese central bank is likely to intervene in the foreign exchange market by selling U.S. dollars
E) both C) and D)