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Q

Question $12$

$45$ pts

In Japan, $90-$day securities have a $4\%$ annualized retum 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 $4\mathrm{.}5\%.$ 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?

The spot rate equals the $180-$day forward rate.

The yen$-$dollar spot exchunge rate oquals the yen$-$dollar exchange rate in the $180-$day forward market.

The spot rate equals the $90-$day forward rate.

The yen$-$dollar spor exchangernite equats the yen$-$dollar exchange rate in the $90-$dry forward market.

The yen$-$dotlar exchange rate in the $90-$dry forward market equals the yen$-$dollar exchange rate in the $180-$day forward market.