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You are valuing a Peruvian company in US dollars. The Peruvian government has a CDS (Credit Default Swap) that is trading at 1%. Which riskfree rate would you use in your valuation
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 CDS spread
D.
d. The rate on a 10- year US treasury bond (2%)