In Japan,90-Day Securities Have a 4% Annualized Return and 180-Day

question 17

Multiple Choice

In Japan,90-day securities have a 4% annualized return and 180-day securities have a 5% annualized return.In the United States,90-day securities have a 4% annualized return and 180-day securities have an annualized return of 4.5%.All securities are of equal risk,and Japanese securities are denominated in terms of the Japanese yen.Assuming that interest rate parity holds in all markets,which of the following statements is most CORRECT?

• A) The yen-dollar spot exchange rate equals the yen-dollar exchange rate in the 90-day forward market.
• B) The yen-dollar spot exchange rate equals the yen-dollar exchange rate in the 180-day forward market.
• C) The yen-dollar exchange rate in the 90-day forward market equals the yen-dollar exchange rate in the 180-day forward market.
• D) The yen-dollar exchange rate in the 180-day forward market equals the yen-dollar exchange rate in the 90-day spot market.
• E) The relationship between spot and forward interest rates cannot be inferred.

---

Definitions:

Latent Ties

Latent ties refer to potential social connections that are not currently active but can be activated when necessary, representing untapped social resources.

Reputational Capital

The value derived from the positive perception of a business or brand by its customers, stakeholders, and the broader public.

Non-Working Spend

Marketing expenses not directly related to content creation or media buying, such as research, strategy development, and agency fees.

Campaign Assets

The tangible and intangible items that are used to support and promote a campaign, including visuals, content, and digital resources.