In the spot market, 1 U.S. dollar can be exchanged for 114 Japanese yen. In the 1-year forward market, 1 U.S. dollar can be exchanged for 119 Japanese yen. The 1-year, risk-free rate of interest is 5.2 percent in the United States. If interest rate parity holds, what is the yield today on 1-year, risk-free Japanese securities?
A) 1.83%
B) 4.71%
C) 5.37%
D) 8.68%
E) 9.81%

Question

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The Answer of In the spot market, 1 U.S. dollar can be exchanged for 114 Japanese yen. In the 1-year forward market, 1 U.S. dollar can be exchanged for 119 Japanese yen. The 1-year, risk-free rate of interest is 5.2 percent in the United States. If interest rate parity holds, what is the yield today on 1-year, risk-free Japanese securities?
A) 1.83%
B) 4.71%
C) 5.37%
D) 8.68%
E) 9.81%

In the Spot Market, 1 U