Q) Six-month US T-bills have a nominal rate of 7%, while default-free Japanese bonds that mature in 6-months have a nominal rate of 5.5%. In the spot exchange market, one yen equals $US 0.012. a. If interest-rate parity holds, what is the 6-month forward exchange rate? b. If the actual 6-month forward exchange rate is less (smaller) than you calculated in (a), what does this suggest about expectations of short-term interest rates in the US and Japan?