Reference no: EM133056060

After having learned everything about parity conditions and CIRP, you decide to investigate whether there are arbitrage opportunities you can exploit by investing in various foreign markets. You observe the following 2-month annualized interest rates and exchange rates: 3.3% interest in Japan 9% interest in the US Spot exchange rate: JPY172/USD 2-month forward exchange rate: JPY121.5/USD Is there an arbitrage opportunity? If so, where would you invest? Assume interest is calculated on a monthly basis and is not compounded. O a. The USD return from investing in the US is 0.55% and the USD return from investing in Japan is 42.34%; we should invest in Japan. 0 b. The USD return from investing in the US is 1.50% and the USD return from investing in Japan is 50.91%; we should invest in the US. 0 c. The USD return from investing in the US is 1.50% and the USD return from investing in Japan is 0.55%; we should invest in Japan. 0 d. The USD return from investing in the US is 0.55% and the USD return from investing in Japan is 43.69%; we should invest in Japan. 0 e. The USD return from investing in the US is 1.50% and the USD return from investing in Japan is 42.34%; we should invest in Japan.