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The one year interest rate is 3.73% in the US and 2.12% in Canada. The current exchange rate of USD to CAD is USD1= CAD

The one year interest rate is 3.73% in the US and 2.12% in Canada. The current exchange rate of USD to CAD is USD1= CAD 1.25. What is the expected exchange rate after one year that satisfies the interest parity condition?

A. 1.2697

B. 1.3487

C. 1.2306

D. 0.8270

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