On 5 November, 2021 the yield on a one-year Colombian government bond is 3.24%, and the Colombian exchange rate is 3,872.50 COP/USD (i.e., 3,872.5 Colombian pesos per US dollar). a) If the uncovered interest parity condition holds, do financial market participants expect the Colombian peso to appreciate or depreciate (vis-à-vis the US dollar) over the next year? What exchange rate are financial market participants expecting for November 5, 2022?

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