The 1-Year Forward Rate for the Swiss Franc Is Sf1

The 1-year forward rate for the Swiss franc is Sf1.1375 = $1. The spot rate is Sf1.1426 = $1. The interest rate on a risk-free asset in Switzerland is 3.3 percent. If interest rate parity exists, a 1 year risk-free security in the U.S. is yielding _____ percent.

A) 2.28 percent
B) 2.51 percent
C) 2.98 percent
D) 3.40 percent
E) 3.76 percent