1. One-year interest rates are 7% in the U.S. and 4% in Canada. Jack the carry trader borrows C$3,000,000 to execute a carry trade. At the start, the exchange rate is $.892/CAD. After one year, the exchange rate is $.874/CAD Carry traders borrow in the low interest rate currency (C$ here) to invest in the high interest rate currency ($ here)

1. What is Jacks USD profit or loss over the year?

B. When Jack starts this trade, he is hoping that the Canadian dollar doesnt ______________.

C. When Jack starts this trade, he is hoping that the USD doesnt__________________.

D. What is the BEEX in one year? (place in terms of USD/CAD to 3 decimal places)