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6. a. A .S. investor purchased a $100,000 Canadian dollar CD 180 days ago at a rate of 7 percent. The Canadian spot rate was

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6. a. A .S. investor purchased a $100,000 Canadian dollar CD 180 days ago at a rate of 7 percent. The Canadian spot rate was 1.367 C$/U.S.$ when the and the tlar cost of the investment was c$ after 180 days? 1 point investment was made. The U.S. dollar cost of the total amount of Canadian investment was a. 136,700; 107,000 b. $100,000; 107,000 c. $73,153; 103,500 $136,799; 103,500 d. b. b. Further suppose that not only was the Canadian spot rate 1.367C$/U.S.$, but that the Cana And in 870..$, but that the Canadian dollar, 1 year CD had a rate of 78. addition, suppose the equivalent U.S. CD rate for one year was 28. Assuming International interest rate parity, international purchasing power parity, and no limits on the ability to engage in covered interest arbitrage, would the markets expect the Canadian dollar to appreciate or depreciate and what should be the resulting 1 year forward exchange rate? 2 pts

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