Use the following information to answer the next two questions.

Suppose a French investor with access to 600,000 euros sees the following:

SR: C$1.05/euro

FR: C$1.25/euro

French interest rate=.09

Canadian interest rate=.16

What should the forward premium be according to IRP?

		.1905
		.0642
		-.0603
		-.16

6.6667 points

QUESTION 8

Find the percentage return available via covered interest arbitrage.

		.1856
		.1744
		.1156
		.291