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The spot rate between Japan and the U.S. is 123.08 = $1, while the 1-year forward rate is 124.12 = $1. A 1-year risk-free security
The spot rate between Japan and the U.S. is 123.08 = $1, while the 1-year forward rate is 124.12 = $1. A 1-year risk-free security in the U.S. is yielding 3.6 percent. What is the rate of return on a 1-year risk-free security in Japan assuming that interest rate parity exists?
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