Given the information: Interest rate in US (Rh) Interest rate in Canada (Rh) Line of credit in US Line of credit in Canada The spot rate for AD(S0) 1-year forward rate for CAD (FR): 7% 5% USD 10,000,000 CAD 12,500,000 0.80 0.812 If you wanted to set up a covered interest rate arbitrage, you should borrow in and invest in

Question 19 1 pts Given the information: Interest rate in US (Rh): Interest rate in Canada (Rh): Line of credit in US Line of credit in Canada The spot rate for CAD (SO): 1-year forward rate for CAD (FR) 7% 5% USD 10,000,000 CAD 12,500,000 $0.80 $0.812 and invest in If you wanted to set up a covered interest rate arbitrage, you should borrow in CAD; USD O USD CAD Question 21 1 pts Given the information: Interest rate in US (Rh): Interest rate in Canada (Rh): Line of credit in US Line of credit in Canada The spot rate for CAD (SO): 1-year forward rate for CAD (FR): 7% 5% USD 10,000,000 CAD 12,500,000 $0.80 $0.812 Which of the following should result from covered interest arbitrage? Downward pressure on the CAD's forward rate. O Downward pressure on the CAD's spot rate. Upward pressure on the US interest rate, Downward pressure on the Canadian interest rate