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Can you please help me understand this for my final!! thank you so much 5. (10 pts) Suppose that the dollar-yen spot exchange rate is

Can you please help me understand this for my final!! thank you so much

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5. (10 pts) Suppose that the dollar-yen spot exchange rate is $0.0090/\ and the 90-day forward exchange rate is $0.0091/. The annual interest rate on US bonds is 6%. a. Assuming that covered interest parity holds, calculate the Japanese annual interest rate on bonds of equivalent risk. b. Suppose now that the annual interest rate on US bonds rose to 8%. Assuming that the Japanese interest rate and the spot exchange rate remain constant, calculate what the forward rate would have to change to in order to reestablish covered interest parity

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