Question: Suppose that expected U.S. inflation is 2.45%, and expected inflation in Japan is 2.14%. The 1-year risk-free rate for dollars is 1.77%. If the Fisher

Suppose that expected U.S. inflation is 2.45%, and expected inflation in Japan is 2.14%. The 1-year risk-free rate for dollars is 1.77%. If the Fisher Effect holds, which will be closest to Japan's 1-year risk-free rate?

A. 2.08%

B. 1.46%

C. 0.68%

D. 2.82%

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