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Montreal First Bank is selling forward contracts on the CAD/USD exchange rate. What exchange rate will they require for a three-month forward rate, if the
Montreal First Bank is selling forward contracts on the CAD/USD exchange rate. What exchange rate will they require for a three-month forward rate, if the spot rate is C\$0.9800/USD, and the interest rates are 3% and 2.5% in Canada and the US respectively? A) 0.9752 B) 0.9788 C) 0.9812 D) 0.9800
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