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According to the interest parity condition, if the US interest rate is 4% and the Australian
interest rate is 9%, then it must be that:
(a) the U.S. dollar is expected to depreciate by 4% against the Australian dollar
(b) the Australian dollar is expected to depreciate by 9% against the U.S. dollar
(c) the Australian dollar is expected to appreciate by 5% against the U.S. dollar
(d) the U.S. dollar is expected to appreciate by 4% against the Australian dollar
(e) the Australian dollar is expected to depreciate by 5% against the U.S. dollar

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