Question
The current spot rate is C$1.377 and the one-year forward rate is C$1.316. The nominal risk-free rate in Canada is 4 percent while it is
The current spot rate is C$1.377 and the one-year forward rate is C$1.316. The nominal risk-free rate in Canada is 4 percent while it is 8 percent in the U.S. Using covered interest arbitrage you can earn an extra _____ profit over that which you would earn if you invested $1 in the U.S.
a $0.0082
b $0.0000
c $0.0779
d $0.0861
e $0.0482
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Finance For Executives Managing For Value Creation
Authors: Gabriel Hawawini, Claude Viallet
2nd Edition
0324117752, 9780324117752
