![](https://cos-cdn.shuashuati.com/pipixue-wap/2020-1230-1107-56/ti_inject-812ce.png)
What would you use as your risk free rate if you were valuing a Peruvian company in Peruvian Sol? (You can still assume that the Peruvian sovereign CDS is trading at 1%.)
A.
a. The rate on a Peruvian 10- year Sol denominated bond (6%)
B.
b. The rate on a Peruvian 10- year US $ denominated bond (3.5%)
C.
c. The rate on a Peruvian 10- year Sol denominated bond minus the Peruvian CDS spread (6%- 1% =5%)
D.
d. The rate on a 10- year US treasury bond (2%)