Suppose that there are now fees associated with foreign exchange transaction. Each time a currency trade is made, the currency broker takes 1% of the...

Suppose that there are now fees associated with foreign exchange transaction. Each time a currency trade is made, the currency broker takes 1% of the transaction as a fee. Derive an equation for uncovered interest parity (UIP) in this environment. For concreteness, use the dollar yen exchange rate, E$/U. For this question, do not use the approximation of the UIP.