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Consider US investors can buy 180 day risk free French bond that promise a 6% nominal annual return (3% 180 day rate). Spot rate is

Consider US investors can buy 180 day risk free French bond that promise a 6% nominal annual return (3% 180 day rate). Spot rate is 0.9 Euro per Dollar. 180 day forward exchange rate is 1.2 Dollar per Euro. What is the nominal annual return of buying 180 days French bond in France?

Question 1 options:

a. 12.35%

b. 11.24%

c. 13.00%

d. 10.22%

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