the one-year interest rate for the U.S. dollar (US$ LIBOR) was

5.20875% and the equivalent yen interest rate (yen LIBOR) was 1.06500%. Based on interest

rate parity, which currency should have a forward premium?

a. The yen.

b. The dollar.

the one-year interest rate for the U.S. dollar (US$ LIBOR) was

3.1000% and the equivalent yen interest rate (yen LIBOR) was 0.0925%. Based on interest rate

parity,

a. the dollar should be at a forward premium of about 3% against the yen.

b. the yen should be at a forward premium of about 0.0925% against the dollar.

c. the dollar should be at a forward premium of about 3.1000% against the yen.

d. the yen should be at a forward premium of about 3% against the dollar.