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Business, 08.04.2021 17:10 ianmorales4894

Suppose the interest rates on bank deposits are 1% in Japan and 3% in Australia. Japan is the Home country and Australia is the Foreign country. As Eyen/A$ increases, a fixed amount of yen can be converted into a amount of Australian dollar, therefore the rate of return on a foreign deposit at a given level of expected future exchange rate.

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Suppose the interest rates on bank deposits are 1% in Japan and 3% in Australia. Japan is the Home c...
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