Question
Suppose the Canadian to US dollar spot rate is 1.24 CAD = 1 USD. The interest rate in the US is 1.82% and the interest
Suppose the Canadian to US dollar spot rate is 1.24 CAD = 1 USD. The interest rate in the US is 1.82% and the interest rate on similar Canadian securities is 1.7%. Ignore transactions costs. According to Interest Rate Parity, the one-year forward rate on the USD should be approximately ____ CAD = 1 USD. Include two decimal places in your answer.
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Teaching Public Budgeting And Finance
Authors: Meagan M. Jordan, Bruce D. McDonald III
1st Edition
1032146680, 978-1032146683
