Question
Find the foreign exchange rate tables in the online versions of The Wall Street Journal (www.wsj.com) or the Financial Times (www.ft.com). a. How many U.S.
Find the foreign exchange rate tables in the online versions of The Wall Street Journal (www.wsj.com) or the Financial Times (www.ft.com). a. How many U.S. dollars are worth one Canadian dollar today? b. How many Canadian dollars are worth one U.S. dollar today? c. Suppose that you arrange today to buy Canadian dollars in 90 days. How many Canadian dollars could you buy for each U.S. dollar? d. If forward rates simply reflect market expectations, what is the likely spot exchange rate for the Canadian dollar in 90 days time? e. Look at the table of money rates in the same issue. What is the three-month interest rate on dollars? f. Can you deduce the likely three-month interest rate for the Canadian dollar?
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