QUESTION $8$

Suppose the current spot rate for the Norwegian krone is NKr$5\mathrm{.}9433$ while the expected inflation rate in Norway is $3\mathrm{.}1$ percent and $1\mathrm{.}7$ percent in the U$.$S$.$ A risk$-$free asset in the U$.$S$.$ is yielding $3\mathrm{.}2$ percent. What risk$-$free rate of return should you expect on a Norwegian security?

A$.4\mathrm{.}4$ percent

B$.5\mathrm{.}9$ percent

C$.4\mathrm{.}6$ percent

D$.5\mathrm{.}1$ percent