The Next Questions Refer to the Following

Multiple Choice

The next questions refer to the following.
The one-year interest rate in the U.S. is 3%, and the one-year rate in Japan is 5%. Investors expect the spot market exchange rate one year from now to be ¥100 = $1.
-A Japanese investor requires a 2% risk premium on US investments. She will acquire US assets if,on the current spot market,$1 can be exchanged for

A) more than ¥103.88
B) between ¥100 and ¥103.88
C) ¥100
D) between ¥96.19 and ¥100
E) less than ¥96.19