If the euro trades at a forward premium against the yen

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1. In terms of risk, is a U.S. investor indifferent about whether to buy a U.S. government bond or a U.K. government bond? Why or why not?

2. If the euro trades at a forward premium against the yen, explain why interest rates in Japan would have to be higher than they are in Europe.

Reference no: EM131316724

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