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Interest Rate Parity Assume that interest rate parity holds. In both the spot market and the 90-day forward market, 1 Japanese yen equals 0.0085 dollar.

Interest Rate Parity

Assume that interest rate parity holds. In both the spot market and the 90-day forward market, 1 Japanese yen equals 0.0085 dollar. In Japan, 90-day risk-free securities yield 4%. What is the yield on 90-day risk-free securities in the United States? Do not round intermediate calculations. Round your answer to two decimal places.

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