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The Figure Given Below Depicts the Foreign Exchange Market for British

Question 63

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The figure given below depicts the foreign exchange market for British pounds traded for U.S. dollars.Figure 22.2
The figure given below depicts the foreign exchange market for British pounds traded for U.S. dollars.Figure 22.2    -To ensure interest rate parity, a decrease in the interest rate on Euroyen relative to Eurodollar deposits will require a greater expected appreciation of the Japanese yen against the U.S. dollar.
-To ensure interest rate parity, a decrease in the interest rate on Euroyen relative to Eurodollar deposits will require a greater expected appreciation of the Japanese yen against the U.S. dollar.

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