If the Annual Nominal Interest Rate on 10-Year U

question 10

Multiple Choice

If the annual nominal interest rate on 10-year U.S.Government Treasury bonds is 7.35 percent and the annual nominal interest rate on 10-year Japanese bonds is 5.75 percent, what is the expected future spot rate in 10 years given that the current spot exchange rate between U.S dollars and Japanese yen is $0.00959?

• A)$0.00834
• B)$0.01114
• C)$0.00973
• D)$0.00946

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