The spot yen/$US exchange rate is yen119.795/$US, and the one-year forward rate is yen114.571/$US. If the annual interest rate on dollar CDs is 6 percent, what annual interest rate would you expect on yen CDs?
A) 1.38 percent
B) 5.32 percent
C) 8.06 percent
D) 17.14 percent
Correct Answer:
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