secured lockdown Desbord de Sche poole pedo Suppose that the current exchange rate between the US dollar and the Canadian dollar is $1USD $1.23CAD. that is, $1.23 Canadian dollars are needed to purchase $1 US dollar, Moreover, the 1 year spot rates in Canada and the USA are 3.5% and 1.8%, respectively. A Canadian business has ordered $2.2 million US dollars worth of software to be delivered in one year. To own US dollars in one year, the business is choosing between the following two options: 1. Exchange Canadian dollars for US dollars and putting the proceeds into a US account for a year. 2. Enter into a Forward contract with the obligation to buy the US dollar at a Forward exchange rate $1USD = $F, CAD (that is $F, Canadian dollars will be needed to purchase $1 US dollar in one year). What is the Forward price (forward exchange rate) Foz that will make the business indifferent between the two options? $ 1.16 O $1.21 O $1.25 $1.31 > cum 10 ochon Sharing lecture O