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Uncovered Interest Parity Suppose the interest rate on one year Canadian bonds is 5% while the interest rate on U.S. bonds is 3%. Currently, the

Uncovered Interest Parity

Suppose the interest rate on one year Canadian bonds is 5% while the interest rate on U.S. bonds is 3%. Currently, the spot rate for one Canadian dollar is $1.

What is the expected exchange rate for the Canadian Dollar in one year?

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