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For the next six months, your company wants to invest $25,000,000 in cash, T-bills in the U.S. are paying 1.50% per annum and the Canadian

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For the next six months, your company wants to invest $25,000,000 in cash, T-bills in the U.S. are paying 1.50% per annum and the Canadian T-bill is paying 2.00% per annum. The current spot rate is 1 USD = 1.26277 CAD, and the six month forward rate is 1 USD = 1.26344 CAD. (30 points...show all calculations for maximum credit) A. Where should you invest to earn more and what is the net difference in earnings? (15 points) B. What is the equilibrium forward exchange rate that would make the CAD earnings the same as the US? (15 points)

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