International cost of borrowing

Reference no: EM13116349

Suppose that on January 1st the annual cost of borrowing in JPY and US dollars are 2% and 7% respectively (Rjpy=2% and RUS=7%). The spot rate of USD on January 1st is USD/JPY110. One year forward rate was quoted as USD/JPY102. What is the USD cost of borrowing in JPY?

Reference no: EM13116349

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