What rate can you earn on a one-year risk-free us security

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Reference no: EM13947399

The spot rate for the Japanese yen currently is ¥121 per $1. The one-year forward rate is ¥120 per $1. A risk-free asset in Japan is currently earning 5 percent. If interest rate parity holds, what rate can you earn on a one-year risk-free U.S. security?

5.83 percent

4.13 percent

5.88 percent

4.18 percent

5.93 percent

Reference no: EM13947399

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