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Hedged return quiz

You are provided with the following information:

Projected bond market returns:
US 9%
UK 10%

Projected Currency returns:
Dollar n/a
Euro 4%
Sterling 6%
Yen 6%

One year interest rates:
US 3%
France 4%
Japan 1%
UK 5%

What is the expected return of a US investor investing in the UK market that has hedged the Pound with the US dollar?

Possible answers:

A: 6%
B: 8%
C: 10%
D: 12%

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