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17.5) Please see the screenshot below and show your work. Thank you. Suppose you observe the following spot and forward exchange rates between the U.S.

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17.5) Please see the screenshot below and show your work. Thank you.

image text in transcribed
Suppose you observe the following spot and forward exchange rates between the U.S. dollar {1:} and the Canadian dollar {3}: ne-Year Forward Spot Exchange Rate Exchange Rate Canadian dollar {U.5. dollarj'Canadian dollar} [1.3311 [1.391113 The current oneyear interest rate on U.S. Treasury securities is ?.??%. If interest rate parity holds, what is the expected yield on one-year Canadian securities of equal risk? 0 5.4.555 0 5.1355 0 5.355 0 4.9155 Interest rate parity recognizes that when you invest in a country other than your home country, two factors affect your investmentreturns on the investment itself and changes in the exchange rate. Wl'lld'l of the following would cause the overall return on your investment to be lower than the inyesonent's stated return? 0 The currency in which the investment is denominated appreciates relatiye to your home currency. 0 Your home currency depreciates relatiye to the currency in which the inyesonent is denominated. 0 Your home currency appreciates relatiye to the currency in which the investment is denominated

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