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The one-year risk-free interest rate in Japan is currently 0.2% while that in the US is currently 1.5%. The spot exchange rate is currently 100

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The one-year risk-free interest rate in Japan is currently 0.2% while that in the US is currently 1.5%. The spot exchange rate is currently 100 Japanese Yen per US Dollar. Compute the no-arbitrage one-year forward exchange rate, explaining each of the steps in your derivation. [4 marks)

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