1. Six-month T-bills have a nominal rate of 6%, while default-free Japanese bonds that mature in 6 months have a nominal rate of 2%. In the spot exchange market, 1 yen equals $0.012. If interest rate parity holds, what is the 6-month forward exchange rate? Round your answer to five decimal places.

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2. Assume that interest rate parity holds. In both the spot market and the 90-day forward market, 1 Japanese yen = 0.011 dollar. And 90-day risk-free securities yield 1.8% in Japan. What is the yield on 90-day risk-free securities in the United States? Round your answer to two decimal places.

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