5. One-year interest rates are 5% in the U.S. and 8% in Canada. "Jack the carry trader" borrows $1,000,000 to undertake a carry trade. At the start, the exchange rate is C$1.220/$. After one year, the exchange rate is C$1.240/$. A. What is Jack's USD profit or loss over the year? B. When Jack starts this trade, he is hoping that the Canadian dollar doesn't C. When Jack starts this trade, he hoping that the USD doesn't

One-year interest rates are 5% in the U.S. and 8% in Canada. "Jack the carry trader" borrows $1,000,000 to undertake a carry trade. At the start, the exchange rate is C$1.220/$. After one year, the exchange rate is C$1.240/$. A. What is Jack's USD profit or loss over the year? B. When Jack starts this trade, he is hoping that the Canadian dollar doesn't C. When Jack starts this trade, he is hoping that the USD doesn't