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Assume the current spot rate for the Norwegian krone is $1 = NKr7.0323, the expected...

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Finance

Assume the current spot rate for the Norwegian krone is $1 = NKr7.0323, the expected inflation rate in Norway is 2.1 percent and 1.2 percent in the U.S. A risk-free asset in the U.S. is yielding 3.7 percent. What nominal risk-free rate of return should you expect on a Norwegian security?

4.2%

2.9%

4.6%

3.8%

3.1%

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