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The Canadian Dollar (CAD) has shown higher volatility in recent days. The spot rate is $0.56/CAD1. Patrick who is a trader in the capital market

The Canadian Dollar (CAD) has shown higher volatility in recent days. The spot rate is $0.56/CAD1. Patrick who is a trader in the capital market division of Darclay's Bank undertakes arbitrage transactions in CAD using a sum of $10 million. Annual interest rates are 10.4 per cent in Australia and 6.4 per cent in Canada. The bank can borrow or lend at these rates. What is the expected spread, if the forward rate is $0.6/ CAD1

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