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Assume that 90-day U.S. securities have a 4.0% annualized interest rate, whereas 90-day Canadian securities have a 4.5% annualized interest rate. In the spot market,

Assume that 90-day U.S. securities have a 4.0% annualized interest rate, whereas 90-day Canadian securities have a 4.5% annualized interest rate. In the spot market, 1 U.S. dollar can be exchanged for 1.4 Canadian dollars. If interest rate parity holds, what is the 90-day forward exchange rate between U.S. and Canadian dollars?

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