Assume the spot yen and euro exchange rate

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Assume the spot Yen/Euro exchange rate is ¥130/€ and the one year forward exchange rate is ¥125/€  

(I) Over the next year the Euro is expected to appreciate against the Yen.

(II) Japanese imports to Europe should increase as a result.

a. (I) is true; (II) is false

b. (I) is false; (II) is true

c. Both statements are true

d. Both statements are false

Reference no: EM131878971

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