If the Interest Rate in Japan Is Less Than the Interest

Multiple Choice

If the interest rate in Japan is less than the interest rate in Canada, rate of return parity suggests that

A) the inflation rate is higher in Japan than in Canada.
B) Canadian financial assets are poor investments.
C) the yen is expected to depreciate against the Canadian dollar.
D) the yen is expected to appreciate against the Canadian dollar.
E) Japanese financial assets are poor investments.