Look at Table 24.1 and assume a 12month U.S. dollar forward rate of $0.9225 Exchange Rate C$*
Question:
Look at Table 24.1 and assume a 12·month U.S. dollar forward rate of $0.9225
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a. Is the U.S. dollar at a forward discount or a premium on the Canadian dollar?
b. What is the annualized percentage discount or premium?
c. If you have no other information about the two currencies, what is your best guess about the spot rate in one year?
d. Suppose that you expect to receive 100,000 U.S. dollars in 1 year. How many Canadian dollars is this likely to be worth?
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a The US dollar is at a forward discount It takes more US do...View the full answer
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Related Book For 
Fundamentals of Corporate Finance
ISBN: 978-1259024962
6th Canadian edition
Authors: Richard Brealey, Stewart Myers, Alan Marcus, Devashis Mitra, Elizabeth Maynes, William Lim
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