The spot rate for the japanese yen currently is yen107 per


The spot rate for the Japanese yen currently is ¥107 per $1. The one-year forward rate is ¥106 per $1. A risk-free asset in Japan is currently earning 7 percent. If interest rate parity holds, what rate can you earn on a one-year risk-free U.S. security?

6.07 percent

7.94 percent

8.01 percent

8.08 percent

6.00 percent

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Financial Management: The spot rate for the japanese yen currently is yen107 per
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