Question
The spot rate between Japan and the U.S. is 105.23 = $1, while the 1-year forward rate is 104.66 = $1. A 1-year risk-free security
The spot rate between Japan and the U.S. is 105.23 = $1, while the 1-year forward rate is 104.66 = $1. A 1-year risk-free security in Japan. is yielding 3.9%. What is the rate of return on a 1-year risk-free security in the U.S. assuming that interest rate parity exists?
| a. | 5.08% | |
| b. | 1.88% | |
| c. | 4.46% | |
| d. | 5.31% | |
| e. | 4.15% |
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Investments
Authors: Zvi Bodie, Alan J. Marcus, Alex Kane
6th Edition
0072861789, 9780072861785
