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Quantitative Problem: Assume that interest rate parity holds. In the spot market 1 Japanese yen =...

Quantitative Problem: Assume that interest rate parity holds. In the spot market 1 Japanese yen = $0.009, while in the 180-day forward market 1 Japanese yen = $0.0093. 180-day risk-free securities yield 1.3% in Japan. What is the yield on 180-day risk-free securities in the United States? Do not round intermediate calculations. Round your answer to two decimal places.
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Answer #1
Future rate=Spot rate*((1+Quoted currency Risk free rate)/(1+Base currency Risk free rate))^time
0.0093=0.009*((1+Quoted currency Risk free rate)/(1+0.013))^0.5
Quoted currency Risk free rate% = 8.17
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