Question
Assume the current spot rate is CAD1.2490 and the 1-year forward rate is CAD1.2445. The nominal risk-free rate in Canada is 2.22 percent while it
Assume the current spot rate is CAD1.2490 and the 1-year forward rate is CAD1.2445. The nominal risk-free rate in Canada is 2.22 percent while it is 1.70 percent in the U.S. Using covered interest arbitrage you can earn an extra _____ profit over that which you would earn if you invested $1000 in the U.S. for one year.
| $8.30 | ||
| $8.50 | ||
| $8.70 | ||
| $8.90 | ||
| $9.10 |
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The Oxford Guide To Financial Modeling
Authors: Thomas S Y Ho, Sang Bin Lee
1st Edition
019516962X, 9780195169621
