Question
In the United States the expected rate of inflation is 4% and in Canada the expected rate of inflation is 8%. The risk-free rate of
In the United States the expected rate of inflation is 4% and in Canada the expected rate of inflation is 8%. The risk-free rate of interest in the U.S. is 3%. What would the risk-free interest rate have to be in Canada for real interest rate parity to hold? a. 6.96% b. 9.05% c. 3.0% d. 4.0%
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Public Finance In Canada
Authors: Harvey S. Rosen, Ted Gayer, Jean-Francois Wen, Tracy Snoddon
5th Canadian Edition
1259030776, 978-1259030772
