Assume that you have computed risk free rates in a dozen major currencies and are coming up with

different numbers. Which of the following will best explain why risk free rates will vary across

currencies?

Rates will be higher in emerging markets than in developed markets

Rates will be higher in high growth markets than low growth markets

Rates will be higher in high$-$inflation currencies than in low$-$inflation currencies

Rates will be higher in riskier markets than in safe ones

Estimation error