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17-7 Interest Rate Parity Assume that interest rate parity holds. In both the spot market and the 90 day forward market, 1 japenese yen equals

17-7 Interest Rate Parity

Assume that interest rate parity holds. In both the spot market and the 90 day forward market, 1 japenese yen equals 0.0086 dollar. In Japan 90 day risk free securities yield 4.6%. What is the yield on 90 day risk free securities in the United States?

Answer is rNOM-US = 4.6 %--Show all work and formulas to support answers.

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