Assume interest rate parity holds. The one-year risk-free rate in the U.S. is 5.14 percent and the one-year risk-free rate in Japan is 5.54 percent. The spot rate between the Japanese yen and the U.S. dollar is 117.27/$. What is the one-year forward exchange rate?

Multiple Choice

• 119.59/$

• 117.27/$

• 120.56/$

• 116.83/$

• 117.72/$